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City of North Chicago, Illinois

Annual Financial Report

Year Ended April 30, 2015

Page

INDEPENDENT AUDITORS' REPORT 1 - 3

MANAGEMENT'S DISCUSSION AND ANALYSIS 4 - 12

BASIC FINANCIAL STATEMENTS

Statement of Net Position 13 - 14

Statement of Activities 15 - 16

Balance Sheet - Governmental Funds 17

Reconciliation of the Balance Sheet of Governmental Funds to the

Statement of Net Position 18

Statement of Revenues, Expenditures, and Changes in Fund Balances -

Governmental Funds 19

Reconciliation of the Statement of Revenues, Expenditures, and Changes

in Fund Balances of Governmental Funds to the Statement of Activities 20

Statement of Net Position - Proprietary Funds 21 - 22

Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 23 - 24

Statement of Cash Flows - Proprietary Funds 25 - 26

Statement of Fiduciary Net Position - Fiduciary Funds 27

Statement of Changes in Fiduciary Net Position - Fiduciary Funds 28

Index for Notes to the Financial Statements 29 - 31

Notes to the Financial Statements 32 - 73

REQUIRED SUPPLEMENTARY INFORMATION (Unaudited)

Schedule of Funding Progress - Illinois Municipal Retirement Fund 74

Schedules of Funding Progress - Police Pension Fund and Firefighters' Pension Fund 75

Schedule of Changes in Net Pension Liability and Related Ratios -

Police Pension Fund 76

Schedule of Changes in Net Pension Liability and Related Ratios -

Firefighters' Pension Fund 77

Schedule of Contributions - Police Pension Fund 78

Schedule of Contributions - Firefighters' Pension Fund 79

Schedule of Investment Returns - Police Pension Fund and Firefighters' Pension Fund 80

Schedule of Funding Progress - Other Postemployment Benefits 81

Schedule of Revenues, Expenditures, and Changes in Fund Balance -

Budget and Actual - General Fund 82 - 83

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual -

Downtown Tax Increment Financing Redevelopment Project Area Fund 84

Notes to the Required Supplementary Information 85

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Table of Contents


For the Year Ended April 30, 2015


Page

SUPPLEMENTARY FINANCIAL INFORMATION

General Fund

Schedule of Revenues and Other Financing Sources - Budget and Actual 86 - 89

Schedule of Expenditures - Budget and Actual 90 - 108

Nonmajor Governmental Funds

Combining Balance Sheet 109 - 112

Combining Schedule of Revenues, Expenditures, and Changes

in Fund Balances (Deficit) 113 - 116

Enterprise Funds

Water Fund

Schedule of Revenues, Expenses, and Changes in Net Position - Budget and Actual 117

Schedule of Operating Revenues - Budget and Actual 118

Schedule of Operating Expenses - Budget and Actual 119 - 120

Sewer Fund

Schedule of Revenues, Expenses, and Changes in Net Position - Budget and Actual 121

Schedule of Operating Revenues - Budget and Actual 122

Schedule of Operating Expenses - Budget and Actual 123 - 124

Internal Service Funds

Combining Schedule of Net Position 125

Combining Schedule of Revenues, Expenses, and Changes

in Net Position 126

Combining Schedule of Cash Flows 127

OTHER SUPPLEMENTARY INFORMATION (Unaudited)

Schedules of Annual Debt Service Requirements

General Obligation Bonds Series 2005A 128

General Obligation Bonds Series 2005B 129

General Obligation Bonds Series 2007A 130

General Obligation Bonds Series 2007B 131 - 132

General Obligation Bonds Series 2007C 133

General Obligation Bonds Series 2014A Refunding 134

General Obligation Bonds Series 2014B Refunding 135

Legal Debt Margin 136

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Table of Contents (Continued)



INDEPENDENT AUDITORS' REPORT

Report on the Financial Statements

Management’s Responsibility for the Financial Statements

Auditors' Responsibility

(Continued)

We have audited the accompanying financial statements of the governmental activities, the business-type

activities, each major fund, and the aggregate remaining fund information of the City of North Chicago, Illinois

(the "City"), as of and for the year ended April 30, 2015, and the related notes to the financial statements, which

collectively comprise the City’s basic financial statements, as listed in the table of contents.

The City's Management is responsible for the preparation and fair presentation of these financial statements in

accordance with accounting principles generally accepted in the United States of America; this includes the

design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of

financial statements that are free from material misstatement, whether due to fraud or error.

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the

financial statements of the Police and Firefighters' Pension Funds, which represent over ninety-nine percent of the

assets, net position, and revenues of the fiduciary funds. Those statements were audited by an other auditor

whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the

Police Pension Fund and Firefighters' Pension Fund, is based solely on the reports of the other auditor. We

conducted our audit in accordance with auditing standards generally accepted in the United States of America and

the standards applicable to financial audits contained in Government Auditing Standards, issued by the

Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material misstatement.

INDEPENDENT AUDITORS' REPORT

The Honorable Mayor and City Council

City of North Chicago

North Chicago, Illinois

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the

risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no

such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of significant accounting estimates made by management, as well as evaluating the overall

presentation of the financial statements. -1-


Auditors' Responsibility (Continued)

Opinions

Emphasis of a Matter

Other Matters

Required Supplementary Information

(Continued)



(Continued)

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above

present fairly, in all material respects, the respective financial position of the governmental activities, the business-

type activities, each major fund, and the aggregate remaining fund information of the City of North Chicago,

Illinois, as of April 30, 2015, and the respective changes in financial position and, where applicable, cash flows

thereof, for the year then ended, in accordance with accounting principles generally accepted in the United States

of America.

Accounting principles generally accepted in the United States of America require that the management’s

discussion and analysis on pages 4 through 12, the Illinois Municipal Retirement Fund historical data on page 75,

the Illinois Municipal Retirement Fund pension data for Police and Firefighters on pages 76 - 80, the other

postemployment benefits data on page 81 and budgetary comparison schedules and notes to the required

supplementary information on pages 82 through 85 be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the Governmental

Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic

financial statements in an appropriate operational, economic, or historical context. We, and other auditors, have

applied certain limited procedures to the required supplementary information in accordance with auditing

standards generally accepted in the United States of America, which consisted of inquiries of management about

the methods of preparing the information and comparing the information for consistency with management’s

responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the

basic financial statements. We do not express an opinion or provide any assurance on the information because the

limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

In disclosed in Note A to the financial statements, in 2015 the City adopted the Governmental Accounting

Standards Board Statement No. 67, Financial Reporting for Pension Plans – an Amendment of GASB Statement

No. 25. Our opinions are not modified with respect to this matter.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinions.

-2-


Other Information

Other Reporting Required by Government Auditing Standards

Deerfield, Illinois

January 5, 2016

In accordance with Government Auditing Standards, we have also issued our report dated January 5, 2016 on

our consideration of the City’s internal control over financial reporting and on our tests of its compliance with

certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that

report is to describe the scope of our testing of internal control over financial reporting and compliance and the

results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.

That report is an integral part of an audit performed in accordance with Government Auditing Standards in

considering the City’s internal control over financial reporting and compliance.

MILLER, COOPER & CO., LTD.

Certified Public Accountants



(Continued)

The other supplementary information has not been subjected to the auditing procedures applied in the audit of the

basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively

comprise the City’s basic financial statements. The other schedules listed in the table of contents (the

supplementary financial information and other supplementary information) are presented for purposes of

additional analysis and are not a required part of the basic financial statements.

The supplementary financial information is the responsibility of management and was derived from and relates

directly to the underlying accounting and other records used to prepare the basic financial statements. Such

information for the year ended April 30, 2015 has been subjected to the auditing procedures applied in the audit of

the basic financial statements and certain additional procedures, including comparing and reconciling such

information directly to the underlying accounting and other records used to prepare the basic financial statements

or to the basic financial statements themselves, and other additional procedures in accordance with auditing

standards generally accepted in the United States of America. In our opinion, the supplementary financial

information for the year ended April 30, 2015 is fairly stated, in all material respects, in relation to the basic

financial statements as a whole for the year ended April 30, 2015.

-3-

-4-

Management's Discussion and Analysis As management of the City of North Chicago, we offer readers of the City of North Chicago's financial

statements this narrative overview and analysis of the financial activities of the City of North Chicago, for

the fiscal year ended April 30, 2015.

Financial Highlights

The assets and deferred outflows of the City of North Chicago (the City) exceeded its liabilities

and deferred inflows at the close of the most recent fiscal year by $32,758,126 (net position).

As of April 30, 2015, the City's governmental funds reported combined ending fund balances of

$27,077,014. Of this amount, $9,947,646, or 36.7 percent, of total general fund expenditures was

unassigned, and available for spending at the City’s discretion (unassigned fund balance).

At April 30, 2015, the City's outstanding General Obligation Bond principal was $23,595,000

which is a decrease of $1,450,000 from the prior fiscal year.

Overview of the Financial Statements

The management’s discussion and analysis serves as an introduction to the City's basic financial

statements, which are the government-wide financial statements, fund financial statements, and notes to

the financial statements. Also included in the report is required supplementary information,

supplementary financial information, and other supplementary information.

Government-Wide Financial Statements: The government-wide financial statements are designed to

provide readers with a broad overview of the City's finances, in a manner similar to a private-sector

business. These statements combine and consolidate short-term, spendable resources with capital assets

and long-term obligations.

The statement of net position presents information on all of the City's assets, deferred outflows, liabilities,

and deferred inflows with the difference reported as net position. Over time, increases or decreases in net

position may serve as a useful indicator of whether the financial position of the City is improving or

deteriorating.

The statement of activities presents information showing how the City's net position changed during the

most recent fiscal year. All changes in net position are reported as soon as the underlying event giving

rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are

reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.,

uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the City that are principally

supported by taxes and intergovernmental revenues (government activities) from other functions that are

intended to recover all or a significant portion of their costs through user fees and charges (business-type

activities). The governmental activities of the City include administration and general government, public

safety, public works, library, and economic development. The business-type activities of the City include

the water and wastewater (sanitary and storm sewer) operations.

The government-wide financial statements can be found on pages 13-16 of this report.

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Overview of the Financial Statements (Continued)

Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control

over resources that have been segregated for specific activities or objectives. The City, like other state

and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related

legal requirements. All of the funds of the City can be divided into three categories: governmental funds,

proprietary funds, and fiduciary funds.

Governmental Funds: Governmental funds are used to account for essentially the same functions

reported as governmental activities in the government-wide financial statements. However, unlike the

government-wide financial statements, governmental fund financial statements focus on near-term

inflows and outflows of spendable resources, as well as on balances of spendable resources available at

the end of the fiscal year. Such information may be useful in evaluating the City's near-term financing

requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial

statements, it is useful to compare the information presented for governmental funds with similar

information presented for governmental activities in the government-wide financial statements. By doing

so, readers may better understand the long-term impact of the government's near-term financing

decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues,

expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between

governmental funds and governmental activities.

Information is presented separately in the governmental fund balance sheet and in the governmental funds

statement of revenues, expenditures, and changes in fund balances for the General and Downtown Tax

Increment Financing Redevelopment Project Area Funds, which are considered to be major funds. Data

for the other governmental funds are combined into a single, aggregated presentation. Individual fund

data for each of these nonmajor governmental funds is provided in the form of combining statements

elsewhere in this report.

The City adopts an annual appropriated budget for its General Fund and certain other funds. A budgetary

comparison statement has been provided for the General Fund and any major special revenue funds to

demonstrate compliance with the budget. In addition, the supplementary financial information also

contains budgetary comparison statements for all nonmajor funds.

Effective for the April 30, 2015 Fiscal Year, the City's Police and Firefighters' Pension Funds have

adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 67

Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25. The objective of this

Statement is to improve financial reporting by state and local governmental pension plans. This

Statement replaces the requirements of Statements No. 25, Financial Reporting for Defined Benefit

Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 50, Pension Disclosures, as

they relate to pension plans that are administered through trusts or equivalent arrangements that meet

certain criteria.

The basic governmental fund financial statements can be found on pages 17-20 of this report.

Proprietary Funds: The City's proprietary funds provide the same type of information found in the

government-wide financial statements, but in more detail.

-6-

Overview of the Financial Statements (Continued)

Proprietary Funds (Continued): The City maintains two different types of proprietary funds.

Enterprise funds are used to report the same functions presented as business-type activities in the

government-wide financial statements. The City uses enterprise funds to account for its water and

wastewater (sanitary and storm sewer) operations. Internal service funds are an accounting device used to

report activities that provide goods or services to City departments. The City uses internal service funds to

account for employee dental and vision self-insurance and retiree's medical insurance programs. Because

both of these services predominantly benefit governmental rather than business-type functions, they have

been included within governmental activities in the government-wide financial statements.

The proprietary fund financial statements provide separate information for the water and wastewater

operations, which are considered to be major funds of the City. Conversely, both internal service funds

are combined into a single, aggregated presentation in the proprietary fund financial statements.

Individual fund data for the internal service funds is provided in the form of combining statements

elsewhere in this report.

Unrestricted net position of the enterprise funds at April 30, 2015 amounted to $9,302,281 and those of

the internal service funds amounted to $185,868.

The basic proprietary fund financial statements can be found on pages 21-26 of this report.

Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties

outside the City. Fiduciary funds are not reflected in the government-wide financial statements because

the resources of those funds are not available to support the City's own programs. Fiduciary funds are

used to account for pension trust funds that are audited by a separate accounting firm, and agency funds.

The basic fiduciary fund financial statements can be found on pages 27-28 of this report.

Notes to the Financial Statements: The notes provide additional information that is essential to a better

understanding of the data provided in the government-wide and fund financial statements. The notes to

the financial statements can be found on pages 32-73 of this report.

Other Information: In addition to the basic financial statements and accompanying notes, this report

also presents certain required supplementary information concerning the City's progress in funding its

obligation to provide pension benefits to its employees. Required supplementary information can be

found on pages 74-85 of this report.

The combining statements referred to earlier in connection with nonmajor governmental funds and

internal service funds are presented following the required supplementary information on pensions in the

supplementary financial information section. Combining and individual fund statements and budgetary

comparison schedules for nonmajor governmental funds and internal service funds can be found on pages

109-112 and 113-116 of this report, respectively.

Government-Wide Financial Analysis

As noted earlier, net position may serve over time as a useful indicator of a government’s financial

position. In the case of the City, assets and deferred outflows exceeded liabilities and deferred inflows by

$32,758,126 at the close of FY 2014-2015.

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Government-Wide Financial Analysis (Continued)

The largest portion of the City's net position reflects its investment in capital assets (i.e., land, buildings,

machinery, and equipment) less any related outstanding debt used to acquire those assets. The City uses

these capital assets to provide services to citizens; consequently, these assets are not available for future

spending. Although the City's investment in capital assets is reported net of related debt, it should be

noted that the resources needed to repay this debt must be provided from other sources, since the capital

assets themselves cannot be used to liquidate these liabilities.

The following table reflects condensed information for the City's net position:

CITY OF NORTH CHICAGO

Net Position

Governmental Business-type

Activities activities Total

2015 2014 2015 2014 2015 2014

Current and other

assets $34,662,632 $33,763,071 $9,815,062 $9,482,387

$44,477,694

$43,245,458

Noncurrent assets

19,935,554

19,628,758

15,516,127

16,017,632

35,451,681

35,646,390

Total assets

54,598,186

53,391,829

25,331,189

25,500,019

79,929,375

78,891,848

Loss on refunding of

bonds 205,782 - 105,172 - 310,954 -

Total deferred

…..outflows 205,782 - 105,172 - 310,954 -

Current liabilities

2,940,836

2,364,099

232,660

1,100,460

3,173,496

3,464,559

Noncurrent

liabilities

35,836,972

34,976,376

3,979,869

4,120,808

40,007,141

39,097,184

Total liabilities

38,777,808

37,340,475

4,212,529

5,221,268

43,180,637

42,561,743

Property taxes levied

for a future period 4,458,914 4,503,857 32,952 - 4,491,866 4,503,857

Total deferred

…..inflows 4,458,914 4,503,857 32,952 - 4,491,866 4,503,857

Net position:

Net investment in

capital assets 7,868,904 6,816,642

11,888,599

12,048,415

19,757,503

18,865,057

Restricted by

enabling legislation

3,549,378

2,978,031

-

-

3,549,378

2,978,031

Restricted for sales

tax refund 1,405,290 1,616,490

-

- 1,405,290 1,616,490

Unrestricted

(1,256,326) 136,334

9,302,281

8,230,336

8,045,955

8,366,670

Total net position $11,567,246 $11,547,497

$21,190,880

$20,278,751

$32,758,126

$31,826,248

At April 30, 2015, the City is able to report positive balances in both categories of net position; the

governmental activities as a whole, as well as for the business-type activities. The same was true for the

prior fiscal year.

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Government-Wide Financial Analysis (Continued)

Governmental Activities: The City's changes in net position and total revenues, expenses, and transfers

for governmental and business-type activities are reflected in the following:


Changes in Net Position


Activities Activities Total

2015 2014 2015 2014 2015 2014

Revenues:

Program revenues:

Charges for services $ 3,441,505 $ 3,297,217 $ 7,436,765 $ 7,541,250 $10,878,270 $10,838,467

Operating grants 2,340,124 1,938,254 - - 2,340,124 1,938,254

Capital grants and

contributions - 27,701 - - - 31,337

General revenues:

Property taxes 9,110,723 8,671,902 30,721 - 9,110,723 8,671,902

Other taxes 4,482,155 4,397,143 - - 4,482,155 4,397,143

Intergovernmental 6,150,307 6,077,423 - - 6,150,307 6,077,423

Other 471,868 474,010 37,181 11,485 509,049 485,495

Total revenues 25,996,682 24,883,650 7,504,667 7,552,735 33,501,349 32,436,385

Expenses:

Administration and general

government 6,395,313 5,642,431 - - 6,395,313 5,642,431

Police

10,468,946 12,054,925 - -

10,468,946

12,054,925

Fire 5,025,049 4,967,400 - - 5,025,049 4,967,400

Public works 1,954,431 2,103,334 - - 1,954,431 2,103,334

Library 397,987 665,317 - - 397,987 665,317

Economic development 2,599,567 1,799,718 - - 2,599,567 1,799,718

Interest and other 1,136,809 1,127,567 - - 1,136,809 1,127,567

Water - - 3,577,730 4,584,145 3,577,730 4,584,145

Sewer - -

1,013,639

1,130,798

1,013,639

1,130,798

Total expenses 27,978,102 28,360,692 4,591,369 5,714,943 32,569,471 34,075,635

Change in net position before transfers

(1,981,420)

(3,477,042) 2,913,298 1,837,792 931,878

(1,639,250)

Transfers 2,001,169 2,000,000

(2,001,169)

(2,000,000) - -

Increase (decrease) in net position 19,749 (1,477,042) 912,129 (162,208) 931,878

(1,639,250)

Net position – beginning of year 11,547,497 13,024,539 20,278,751 20,440,959 31,826,248 33,465,498

Net position – end of year $11,567,246 $11,547,497 $21,190,880 $20,278,751 $32,758,126 $31,826,248

-9-

Financial Analysis of the City's Funds

As previously noted, the City uses fund accounting to ensure and demonstrate compliance with finance-

related legal requirements.

Governmental Funds: The focus of the City's governmental funds is to provide information on near-

term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the

City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a

government's net resources available for spending at the end of the fiscal year.

As of April 30, 2015, the combined ending fund balances of the City's governmental funds were

$27,077,014, an increase of $339,461 in comparison with the prior year. Approximately 37% or $9.9

million constitutes unassigned fund balance, which is available for spending at the City’s discretion. The

remainder of the fund balance is classified as nonspendable/restricted to indicate that it is not available for

spending because it has already been designated for 1) inventory; 2) prepaid items; 3) property held for

resale-$7,497,386; 4) special revenue funds-$5,053,157; 5) debt service-$1,278,828, 6) capital projects-

$1,593,525, and 7) notes payable to Illinois Department of Revenue-$1,405,290 for sales tax

reimbursements.

The General Fund is the primary operating fund of the City. At the end of the fiscal year, unassigned

fund balance of the General Fund was $9,947,646. As a measure of the General Fund’s liquidity, it may

be useful to compare both unassigned fund balance and total fund balance to total fund expenditures.

Unassigned fund balance represented 43.5% of total General Fund expenditures, while total fund balance

represents 51.7% of that same amount.

The City’s General Fund fund balance increased by $175,349 during the current fiscal year. Factors

related to this change are as follows:

While revenue earned from the extension of property taxes declined, revenue earned from all

other sources of taxes, both local and state shared, increased by $207,038.

There was a sizable increase in funding from grants ($263,965) as a result of participating in the

FEMA sponsored program for fire first responders. In addition, revenue realized from earned

fines and fees increased by $165,580. Overall, the City’s General Fund revenue profile increased

by $566,429 or 2.80% from FY 2013-2014.

Expenditures increased by $1,921,415 although they were slightly less than the budget approved

for the fiscal year. The most significant net increases were related to public safety (Police and

Fire)-$916,836 and for capital outlay-$574,255.

Proprietary Funds: The City's proprietary fund statements provide the same type of information found

in the government-wide financial statements, but with more detail.

The total net position of the water and sewer operations at the end of the year amounted to $21,190,880,

as compared to $20,278,751 for the prior year, an increase of $912,129 or 4.50; the unrestricted balance at

year end totaled $9,302,281.

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General Fund Budgetary Highlights

The initial budgeted revenue and other financing sources were anticipated at the time of Budget adoption

to not be sufficient to offset budgeted expenditures and other financing uses, leaving an estimated budget

deficit of $402,588. As a result, during the fiscal period, the recruitment of certain budgeted positions

and capital items were deferred, coupled with the implementation of other operating efficiencies.

Realized revenues and other financing sources were $23,020,331, compared to the budget of $22,431,539,

a positive variance against budget of $588,792. The difference between the budget and the amount

realized was spread across the entire revenue profile of the General Fund, although there was a significant

increase in one time revenue due to the proceeds of capital financing. Total expenditures were

$22,844,982, compared to the budget of $22,834,127, a positive variance against budget of $10,855. The

difference between budget and actual is again related to deferring the recruitment of certain authorized

positions and deferring the acquisition of capital items. Realized revenues exceeded actual expenditures,

thus eliminating the need to draw upon existing fund balance and in actuality, allowed the total fund

balance to slightly increase.

Capital Asset and Debt Administration

Capital Assets: The City's investment in capital assets for its governmental and business-type activities

as of April 30, 2015 amounts to $35,451,681 (net of accumulated depreciation). This investment in

capital assets includes land, land improvements, buildings and improvements, infrastructure, library

collections, and machinery and equipment.

For the most part, assets were added during the course of recurring improvements to City infrastructure,

most specifically at the water plant and as part of recurring street maintenance. Also, new vehicles and

equipment were purchased for both fire and police as part of normal scheduled replacement practices.

Capital asset detail, by category of asset, is as follows:


Capital Assets (net of depreciation)


activities activities Total

2015 2014 2015 2014 2015 2014

Land $ 2,831,841 $ 2,831,841 $ 2,435 $ 2,435 $ 2,834,276 $ 2,834,276

Land improvements

207,301

219,865

106,515

109,852

313,816

329,717

Buildings and improvements

1,887,865

1,992,672

4,053,722

4,179,687

5,941,587

6,172,359

Infrastructure

12,641,962

12,166,898 -

-

12,641,962

12,166,898

Library collections

162,438

169,902 -

-

162,438

169,902

Machinery and equipment

2,204,147

2,247,580 11,353,455

11,725,658

13,557,602

13,973,238

Total

$19,935,554

$19,628,758

$15,516,127

$16,017,632

$35,451,681

$35,646,390

Additional information on the City's capital assets can be found in Note E on pages 50-52 of this report.

-11-

Capital Asset and Debt Administration (Continued)

Long-Term Debt: At April 30, 2015, the City had outstanding general obligation debt of $23,595,000

backed by the full faith and credit of the City. Other City debt totals $16,221,841 as listed in the

following table. Total bonded debt and other debt at the end of the fiscal year was $39,816,841


Long Term Debt


activities Activities Total

2015 2014 2015 2014 2015 2014

GO Bonds:

Series 2005A $ 640,000 $ 7,415,000 $ - $ - $ 640,000 $ 7,415,000

Series 2005B - - 175,000 2,675,000 175,000 2,675,000

Series 2007A 1,860,000 2,030,000 - - 1,860,000 2,030,000

Series 2007B 4,740,000 4,740,000 - - 4,740,000 4,740,000

Series 2007C 7,895,000 8,185,000 - - 7,895,000 8,185,000

Series 2014A

Refunding

6,010,000 -

-

- 6,010,000

-

Series 2014B

Refunding

-

-

2,275,000

- 2,275,000

-

Total Bonds

$21,145,000

$22,370,000 $ 2,450,000 $ 2,675,000

$23,595,000

$25,045,000

Other:

Bond issuance

premium 683,131 264,665 203,971 - 887,102 264,665

Compensated

Absences

1,773,574

1,618,156 148,370 151,591

1,921,944

1,769,747

Capital lease 321,640 210,579 - - 321,640 210,579

Other post

employment benefits

114,101

111,961 - - 114,101 111,961

Lawsuit settlement

liability 49,100 50,600 - - 49,100 50,600

Note payable to Lake

Forest Bank 115,939 308,629 - - 115,939 308,629

Note payable to State

of Illinois, Office of

the Fire Marshal - 20,000 - -

- 20,000

Note payable to IL

Department of

Revenue

1,405,290

1,616,490 - -

1,405,290

1,616,490

Net Firefighter and

police pension

obligation

10,229,197

8,405,296 - -

10,229,197

8,405,296

Note payable to

Abbott Laboratories - - 280,462 339,275 280,462

339,275

Note payable to IL

Environmental

Protection Agency - - 897,066 954,942 897,066

954,942

Total Other $14,691,972 $12,606,376 $ 1,529,869 $ 1,445,808

$16,221,841

$14,052,184

Total $35,836,972 $34,976,376 $ 3,979,869 $ 4,120,808 $39,816,841 $39,097,184

-12-

Capital Asset and Debt Administration (Continued)

Additional information on the City's long-term debt can be found in Note F on pages 53-59 of this report.

Economic Factors:

North Chicago is a diverse community consisting primarily of residential homes, several non-profit

organizations, and major corporations including Abbott Laboratories, AbbVie, Rosalind Franklin

University, and Naval Station Great Lakes, which is the only recruit training facility in the United States.

The City property tax revenues remained stable during this with other fees and taxes generally increasing,

although slightly, as compared to the prior fiscal year. Ideally, this is an indication that the local

economy has begun to stabilize. However, caution and a conservative approach to all aspects of

budgeting and financial execution on a daily basis need to be paramount.

Bond Rating: The City’s general obligation bonds are rated “A” by Standard & Poor’s Rating Services.

Rick Management: The City has a new third-party administrator for its liability and workers’

compensation claims. Based upon favorable insurance experience and rates, the City reduced certain

deductibles to provide more stable coverage during the current economy.

Significant Future Accounting Pronouncements

As disclosed in Footnote N, the City will implement GASB 68 and 71 in fiscal 2016. Specific changes to

the District's financial statements will relate to the recognition of net pension liability, deferred outflows

of resources, deferred inflows of resources, and pension expense. The most significant effect of this

statement will be the requirement that the City record the net pension liability related to the Illinois

Municipal Retirement Fund, the Police Pension Fund, and the Firefighters Pension Fund as part of long-

term liabilities in the statement of net position (see Note I). The City anticipates that the adoption of these

statements will have a significant negative impact on the April 30, 2016 the government-wide financial

statements.

Requests for Information

This financial report is designed to provide a general overview of the City of North Chicago’s finances.

Questions concerning any of the information provided in this report or requests for additional financial

information should be addressed to the Office of the Comptroller, City of North Chicago, 1850 Lewis

Avenue, North Chicago, Illinois 60064 or on the City website at www.northchicago.org.

BASIC FINANCIAL STATEMENTS



Current assets

Cash, cash equivalents, and investments $ 13,738,250 $ 9,083,577 $ 22,821,827

Property taxes receivable 9,184,081 - 9,184,081

Other taxes receivable 496,774 - 496,774

Intergovernmental receivable 75,760 - 75,760

Other receivables, net 3,237,011 968,559 4,205,570

Internal balances 237,074 (237,074) -

Prepaid expenses 189,890 - 189,890

Inventory 6,406 - 6,406

Property held for resale 7,497,386 - 7,497,386

Total current assets 34,662,632 9,815,062 44,477,694

Noncurrent assets

Land and other capital assets

not being depreciated 2,831,841 2,435 2,834,276

Capital assets, net of accumulated

depreciation 17,103,713 15,513,692 32,617,405

Total noncurrent assets 19,935,554 15,516,127 35,451,681

Total assets 54,598,186 25,331,189 79,929,375

Loss on refunding of bonds 205,782 105,172 310,954

Total deferred outflows 205,782 105,172 310,954

The accompanying notes are an integral part of this statement.

DEFERRED OUTFLOWS

ASSETS

Primary Government


Statement of Net Position

April 30, 2015

-13-



Current liabilities

Accounts payable $ 1,715,519 $ 182,525 $ 1,898,044

Accrued payroll 472,981 50,135 523,116

Unearned revenue 67,142 - 67,142

Claims payable 12,803 - 12,803

Other liabilities 672,391 - 672,391

Noncurrent liabilities

Due within one year 1,961,328 314,540 2,275,868

Due in more than one year 33,875,644 3,665,329 37,540,973

Total liabilities 38,777,808 4,212,529 42,990,337

DEFERRED INFLOWS

Property taxes levied for a future period 4,458,914 32,952 4,491,866

Total deferred inflows 4,458,914 32,952 4,491,866

NET POSITION

Net investment in capital assets 7,868,904 11,888,599 19,757,503

Restricted by enabling legislation 3,549,378 - 3,549,378

Restricted for sales tax refund 1,405,290 - 1,405,290

Unrestricted (1,256,326) 9,302,281 8,045,955

Total net position $ 11,567,246 $ 21,190,880 $ 32,758,126

(Concluded)




April 30, 2015

LIABILITIES

Primary Government

-14-

Charges for Operating

Expenses Services Grants

Functions/Programs

Primary government

Governmental activities

Administration and general government $ 6,395,313 $ 112,534 $ -

Police 10,468,946 1,213,260 -

Fire 5,025,049 304,502 644,012

Public works 1,954,431 1,794,897 1,121,918

Library 397,987 16,312 98,918

Economic development 2,599,567 - 475,276

Interest and other 1,136,809 - -

Total governmental activities 27,978,102 3,441,505 2,340,124

Business-type activities

Water 3,549,848 6,021,491 -

Sewer 984,619 1,415,274 -

Total business-type activities 4,534,467 7,436,765 -

Total primary government $ 32,512,569 $ 10,878,270 $ 2,340,124

General revenues

Property taxes

Other taxes

Intergovernmental

Miscellaneous

Interest income

Bond issuance costs

Transfers

Total general revenues,

transfers, and other

Change in net position

Net position, beginning of year

Net position, end of year



Statement of Activities


Program Revenues

-15-



$ (6,282,779) $ - $ (6,282,779)

(9,255,686) - (9,255,686)

(4,076,535) - (4,076,535)

962,384 - 962,384

(282,757) - (282,757)

(2,124,291) - (2,124,291)

(1,136,809) - (1,136,809)

(22,196,473) - (22,196,473)

- 2,471,643 2,471,643

- 430,655 430,655

- 2,902,298 2,902,298

(22,196,473) 2,902,298 (19,294,175)

9,110,723 30,721 9,141,444

4,482,155 - 4,482,155

6,150,307 - 6,150,307

466,053 12,943 478,996

5,815 24,238 30,053

- (56,902) (56,902)

2,001,169 (2,001,169) -

22,216,222 (1,990,169) 20,226,053

19,749 912,129 931,878

11,547,497 20,278,751 31,826,248

$ 11,567,246 $ 21,190,880 $ 32,758,126

Net (Expense) Revenue and Changes in Net Position

Primary Government

-16-

Downtown Tax

Increment Financing Nonmajor Total

Redevelopment Governmental Governmental

General Project Area Funds Funds

Cash and cash equivalents $ 7,178,634 $ 1,336,465 $ 4,883,122 $ 13,398,221

Property taxes receivable 6,332,008 - 2,852,073 9,184,081

Other taxes receivable 496,774 - - 496,774

Intergovernmental receivable - - 75,760 75,760

Other receivables 2,679,352 - 536,087 3,215,439

Prepaid expense 189,890 - - 189,890

Due from other funds 538,855 182,400 174,062 895,317

Inventory 6,406 - - 6,406

Property held for resale 152,000 6,125,314 1,220,072 7,497,386

Total assets $ 17,573,919 $ 7,644,179 $ 9,741,176 $ 34,959,274

LIABILITIES, DEFERRED INFLOWS,

AND FUND BALANCES

Liabilities

Accounts payable $ 1,273,761 $ 7,799 $ 387,948 $ 1,669,508

Accrued payroll 465,085 - 7,896 472,981

Other liabilities 669,248 - 3,143 672,391

Unearned fees - - 67,142 67,142

Due to other funds 92,542 - 448,782 541,324

Total liabilities 2,500,636 7,799 914,911 3,423,346

Deferred inflows

Property taxes levied for a future period 3,267,165 - 1,191,749 4,458,914

Total deferred inflows 3,267,165 - 1,191,749 4,458,914

Fund balances

Nonspendable for inventory 6,406 - - 6,406

Nonspendable for prepaid items 189,890 - - 189,890

Nonspendable for property held for resale 152,000 6,125,314 1,220,072 7,497,386

Restricted for special revenue funds - - 5,053,157 5,053,157

Restricted for debt service - - 1,278,828 1,278,828

Restricted for capital projects - 1,511,066 82,459 1,593,525

Restricted for sales tax refund 1,405,290 - - 1,405,290

Assigned for accounts payable clearing 104,886 - - 104,886

Unassigned 9,947,646 - - 9,947,646

Total fund balances 11,806,118 7,636,380 7,634,516 27,077,014

Total liabilities, deferred inflows,

and fund balances $ 17,573,919 $ 7,644,179 $ 9,741,176 $ 34,959,274


ASSETS

City of North Chicago, IllinoisGovernmental Funds

Balance Sheet

April 30, 2015

-17-

Amounts reported for governmental activities in the statement of net position are different because:

Total fund balances - governmental funds $ 27,077,014

19,935,554

205,782

(35,836,972)

185,868

Net position of governmental activities $ 11,567,246


Long-term liabilities, including bonds payable, note payables, bond issuance

premium, compensated absences payable, capital leases payable, other

postemployment benefits, lawsuit settlement liability, and net pension obligations

are not due and payable in the current period. Therefore, these liabilities are not

reported in the current period and, consequently, are not reported in the

governmental funds.

The net position of the internal service funds are included in the governmental

activities in the statement of net position.


Reconciliation of the Balance Sheet of Governmental Funds to

the Statement of Net Position

April 30, 2015

Capital assets used in governmental activities are not financial resources and,

therefore, are not reported in the governmental funds.

Deferred charges included in the statement of net position are not available to pay

for current period expenditures and, accordingly, are not included in the

governmental funds balance sheet.

-18-

Downtown Tax

Increment Financing Nonmajor Total

Redevelopment Governmental Governmental

General Project Area Funds Funds

Revenues

Property taxes $ 5,999,400 $ - $ 3,111,323 $ 9,110,723

Taxes - other 4,327,303 - 154,852 4,482,155

Licenses and permits 601,273 - - 601,273

Intergovernmental 6,137,125 - 1,130,027 7,267,152

Grants 641,148 - 582,131 1,223,279

Fines and fees 2,795,746 - 16,312 2,812,058

Interest 3,970 168 1,545 5,683

Miscellaneous 239,538 118 185,098 424,754

Total revenues 20,745,503 286 5,181,288 25,927,077

Expenditures

Current

General government 2,526,141 51,551 - 2,577,692

Administration services 3,431,630 - 24,148 3,455,778

Highway and streets 1,192,189 - 160,361 1,352,550

Public safety 13,172,296 - 69,250 13,241,546

Culture and recreation - - 672,906 672,906

Economic development 1,186,833 - 1,412,734 2,599,567

Debt service -

Principal retirement 590,981 - 1,055,000 1,645,981

Interest and other 26,515 - 1,161,342 1,187,857

Bond issuance costs - 140,646 140,646

Capital outlay 718,397 - 569,694 1,288,091

Total expenditures 22,844,982 51,551 5,266,081 28,162,614

Deficiency of revenues over expenditures (2,099,479) (51,265) (84,793) (2,235,537)

Other financing sources (uses)

Bond proceeds - - 6,010,000 6,010,000

Premium on bonds sold - - 535,135 535,135

Transfer to escrow agent - - (6,329,814) (6,329,814)

Proceeds from capital lease 317,209 - - 317,209

Gain on sale of land - - 41,299 41,299

Transfers in 1,957,619 - 43,550 2,001,169

Total other financing sources 2,274,828 - 300,170 2,574,998

Net change in fund balance 175,349 (51,265) 215,377 339,461

Fund balances, beginning of year 11,630,769 7,687,645 7,419,139 26,737,553

Fund balances, end of year $ 11,806,118 $ 7,636,380 $ 7,634,516 $ 27,077,014


Governmental Funds

Statement of Revenues, Expenditures, and Changes in Fund Balances



-19-

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds $ 339,461

306,796

205,782

1,002,694

(1,863,290)

Internal service funds are reported separately in the fund financial statements. 28,306

Change in net position - governmental activities $ 19,749


Some expenses reported in the statement of activities do not require the use of

current financial resources and, therefore, are not reported as expenditures in

governmental funds.

The issuance of long-term debt provides current financial resources to governmental

funds, while the repayment of the principal of long-term debt consumes the current

financial resources of governmental funds. Also, governmental funds report the

effect premiums, discounts, and similar items when debt is first issued, whereas

these amounts are deferred and amortized in the statement of activities. This

amount is the net effect of the difference in the treatment of long-term debt and

related items.

Governmental funds report capital outlays as expenditures. However, in the

statement of activities, the cost of those assets is allocated over their estimated

useful lives and reported as depreciation expense. This is the amount by which

capital outlay exceeded depreciation expense in the current period.

Governmental funds report the effects of deferred charges when the debt is issued.

However, these amounts are deferred and amortized in the statement of activities.

This is the amount of the current year net effect of these differences.



Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances

of Governmental Funds to the Statement of Activities

-20-

Governmental

Activities

Internal

Service

Water Sewer Total Funds

Current assets

Cash and cash equivalents $ 6,613,101 $ 2,470,476 $ 9,083,577 $ 340,029

Other receivables, net 774,104 194,455 968,559 21,572

Total current assets 7,387,205 2,664,931 10,052,136 361,601

Noncurrent assets

Land and other capital assets

not being depreciated 2,435 - 2,435 -

Capital assets, net of

accumulated depreciation 11,469,278 4,044,414 15,513,692 -

Total noncurrent assets 11,471,713 4,044,414 15,516,127 -

Total assets 18,858,918 6,709,345 25,568,263 361,601

Loss on refunding of bonds 51,534 53,638 105,172 -

Total deferred outflows 51,534 53,638 105,172 -

(Continued)



Proprietary Funds


April 30, 2015

Business-Type Activities - Enterprise Funds

Major Funds

ASSETS

DEFERRED OUTFLOWS

-21-

Governmental

Activities

Internal

Service


Current liabilities

Accounts payable $ 150,469 $ 32,056 $ 182,525 $ 46,011

Accrued payroll 39,273 10,862 50,135 -

Noncurrent liabilities -

current portion 225,290 89,250 314,540 -

Claims payable - - - 12,803

Due to other funds 216,465 20,609 237,074 116,919

Total current liabilities 631,497 152,777 784,274 175,733

Noncurrent liabilities 1,444,704 2,220,625 3,665,329 -

Total liabilities 2,076,201 2,373,402 4,449,603 175,733

Deferred inflows

Property taxes levied for a future period 16,147 16,805 32,952 -

Total deferred inflows 16,147 16,805 32,952 -

NET POSITION

Net investment in capital assets 9,997,611 1,890,988 11,888,599 -

Unrestricted 6,820,493 2,481,788 9,302,281 185,868

Total net position $ 16,818,104 $ 4,372,776 $ 21,190,880 $ 185,868

(Concluded)



Proprietary Funds


April 30, 2015


Major Funds

LIABILITIES

-22-

Governmental

Activities -

Internal

Service


Operating revenues

Charges for sales and services $ 6,021,491 $ 1,415,274 $ 7,436,765 $ 321,616

Miscellaneous 12,943 - 12,943 -

Total operating revenues 6,034,434 1,415,274 7,449,708 321,616

Operating expenses

Operations 2,961,979 802,882 3,764,861 293,442

Depreciation 547,409 123,744 671,153 -

Total operating expenses 3,509,388 926,626 4,436,014 293,442

Operating income 2,525,046 488,648 3,013,694 28,174

Nonoperating revenues (expenses)

Property taxes 15,054 15,667 30,721 -

Bond issuance costs (27,882) (29,020) (56,902)

Interest income 12,263 11,975 24,238 132

Interest expense (40,460) (57,993) (98,453) -

Total nonoperating revenues

(expenses) (41,025) (59,371) (100,396) 132

Income before transfers 2,484,021 429,277 2,913,298 28,306

(Continued)


Major Funds



Proprietary Funds

Statement of Revenues, Expenses, and Changes in Net Position


-23-

Governmental

Activities -

Internal

Service


Transfers out $ (1,600,000) $ (401,169) $ (2,001,169) $ -

Change in net position 884,021 28,108 912,129 28,306

Net position, beginning of year 15,934,083 4,344,668 20,278,751 157,562

Net position, end of year $ 16,818,104 $ 4,372,776 $ 21,190,880 $ 185,868

(Concluded)


Major Funds



Proprietary Funds

Statement of Revenues, Expenses, and Changes in Net Position (Continued)


-24-

7 25 Governmental

Activities -

Internal

Water Sewer Total Service Funds

Cash flows from operating activities

Cash received from customers $ 6,093,680 $ 1,455,471 $ 7,549,151 $ 300,044

Cash payments for goods and services (2,556,373) (430,412) (2,986,785) (273,977)

Cash payments to employees (1,221,603) (427,494) (1,649,097) -

Net cash provided by operating activities 2,315,704 597,565 2,913,269 26,067

Cash flows from noncapital financing activities

Property tax revenues 15,054 15,667 30,721 -

Interfund borrowing 536,490 15,549 552,039 40,864

Operating transfers in (out) (1,600,000) (401,169) (2,001,169) -

Net cash provided by (used in)

noncapital financing activities (1,048,456) (369,953) (1,418,409) 40,864

Cash flows from capital and related financing activities

Purchase of equipment and infrastructure (125,660) (43,988) (169,648) -

Payment of note payable (58,813) - (58,813) -

Payment of bond principal (85,000) (85,000) (170,000) -

Payments on loan payable - (57,876) (57,876) -

Interest paid (35,775) (53,117) (88,892) -

Net cash used in capital and

related financing activities (305,248) (239,981) (545,229) -

Cash flows from investing activities

Interest received 1,158 416 1,574 132

Net cash provided by investing

activities 1,158 416 1,574 132

NET INCREASE (DECREASE) IN

CASH AND CASH EQUIVALENTS 963,158 (11,953) 951,205 67,063

Cash and cash equivalents, beginning of year 5,649,943 2,482,429 8,132,372 272,966

Cash and cash equivalents, end of year $ 6,613,101 $ 2,470,476 $ 9,083,577 $ 340,029

(Continued)



Proprietary Funds

Statement of Cash Flows


Major Funds


-25-

Governmental

Activities -

Internal

Water Sewer Total Service Funds

Reconciliation of operating income

to net cash provided by operating activities

Operating income $ 2,525,046 $ 488,648 $ 3,013,694 $ 28,174

Adjustments to reconcile operating

income to net cash provided by

operating activities

Depreciation 547,409 123,744 671,153 -

Increase in property tax receivables (31,200) (32,472) (63,672) -

(Increase) decrease in other receivables 74,299 55,864 130,163 (21,572)

Increase (decrease) in accounts payable (825,103) (36,867) (861,970) 21,321

Increase (decrease) in accrued payroll 2,509 (8,339) (5,830) -

Increase in property taxes levied for a future period 16,147 16,805 32,952 -

Increase (decrease) in compensated

absences payable 6,597 (9,818) (3,221) -

Decrease in claims payable - - - (1,856)

Net cash provided by operating activities $ 2,315,704 $ 597,565 $ 2,913,269 $ 26,067

Non-cash noncapital financing activities

Principal amount $ 1,114,750 $ 1,160,250 $ 2,275,000

Plus: original issue premium 111,051 115,584 226,635

Less: cost of issuance (27,882) (29,020) (56,902)

Deposit to Escrow $ 1,197,919 $ 1,246,814 $ 2,444,733

(Concluded)


The City issued 2014B General Obligation

Refunding Bonds with proceeds used to pay bond

issuance costs and to fund an escrow account to

repay the 2005B General Obligation Bonds. The

non-cash components of the 2014B General

Obligation Refunding Bonds were as follows:

Statement of Cash Flows (Continued)

Major Funds



Proprietary Funds


-26-

16

Agency

Fund

Police Firefighters' Temporary

Pension Pension Total Escrow

ASSETS

Cash and cash equivalents $ 344,935 $ 694,333 $ 1,039,268 $ 1,842

Investments 16,073,538 8,764,824 24,838,362 -

Prepaid expenses 517 517 1,034 -

Interest receivable 70,061 624 70,685 -

Total assets 16,489,051 9,460,298 25,949,349 1,842

LIABILITIES

Accounts payable 2,645 6,586 9,231 -

Escrow funds payable - - - 1,842

Total liabilities 2,645 6,586 9,231 1,842

PLAN NET POSITION

Plan net position held in trust for

pension benefits 16,486,406 9,453,712 25,940,118 -

Total net position $ 16,486,406 $ 9,453,712 $ 25,940,118 $ -


Pension Trust Funds


Fiduciary Funds

Statement of Fiduciary Net Position

April 30, 2015

-27-

Police Firefighters'

Pension Pension Total

Additions

Contributions

Employer $ 871,239 $ 612,133 $ 1,483,372

Plan members 449,402 221,905 671,307

Total contributions 1,320,641 834,038 2,154,679

Investment earnings

Interest and dividends 409,247 190,175 599,422

Net change in fair value of investments 566,800 425,651 992,451

Total investment earnings 976,047 615,826 1,591,873

Less investment expenses 121,788 35,300 157,088

Net investment income 854,259 580,526 1,434,785

Total additions 2,174,900 1,414,564 3,589,464

Deductions

Administration 54,680 47,171 101,851

Benefits 2,090,560 1,297,814 3,388,374

Refunds of contributions 195,761 18,191 213,952

Total deductions 2,341,001 1,363,176 3,704,177

Change in net position (166,101) 51,388 (114,713)

Net position held in trust for pension benefits

Beginning of year 16,652,507 9,402,324 26,054,831

End of year $ 16,486,406 $ 9,453,712 $ 25,940,118



Fiduciary Funds

Statement of Changes in Fiduciary Net Position


-28-

NOTES Page

A. Summary of Significant Accounting Policies

1. Reporting Entity 32

2. New Accounting Pronouncement 32

3. Government-wide and Fund Financial Statements 33

4. Fund Accounting 33 - 34

5. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 34 - 36

6. Deferred Outflows / Deferred Inflows 36

7. Budgets 36 - 37

8. Cash and Cash Equivalents 37

9. Investments 37

10. Receivables 37 -38

11. Interfund Receivables and Payables 38

12. Inventories 38

13. Capital Assets 38 - 39

14. Property Held for Resale 39

15. Accumulated Unpaid Vacation, Sick Pay, and Other Employee Benefit Amounts 39

16. Long-Term Obligations 39

17. Property Tax Revenue 40

18. Postemployment Healthcare Benefits 40

19. Use of Estimates 40

20. Fund Balance 40 - 41

B. Reconciliation of Government-wide and Fund Financial Statements

1. Explanation of Certain Differences Between the Governmental Funds Balance

Sheet and the Government-wide Statement of Net Position 41 - 42

2. Explanation of Certain Differences Between the Governmental Funds Statement

of Revenues, Expenditures, and Changes in Fund Balances and the

Government-wide Statement of Activities 42 - 43

C. Deposits and Investments 44 - 48

1. Interest Rate Risk 46

2. Credit Risk 46 - 47

3. Custodial Credit Risk 47 - 48

4. Concentration of Credit Risk 48

D. Interfund Receivables and Payables 49

City of North Chicago, IllinoisIndex for Notes to the Financial Statements

April 30, 2015

-29-

NOTES (Continued) Page

E.

1. Governmental Activities 50

2. Business-type Activities 51

3. Depreciation 52

4. Construction Commitments 52

F.

1. 53 - 55

2. 55 - 56

3. 57

4. 57

5. 57

6. Note Payable to Illinois Department of Revenue 58

7. Capital Leases 59

8. 59

9. 59

G. Interfund Transfers 60

H. Concentration of Risk - Revenue Source 60

I. Defined Benefit Pension Plans

1. Illinois Municipal Retirement Fund

a. Plan Description 61

b. Funding Policy 61

c. Annual Pension Cost 61 - 62

d. Funded Status and Funding Progress 62

2. Police and Firefighters' Pension Plans

a. Plan Descriptions 62 - 63

b. Summary of Significant Accounting Policies and Plan Asset Matters 63 - 64

c. Investments 64

d. Actuarial Assumptions 64

e. Contributions 65

f. Funded Status and Funding Progress 66

g. Three-Year Trend Information - Pension Trust Funds 66

h. Net Pension Liability 67

i. Actuarial Assumptions 67

j. Discount Rate 68

k. Discount Rate Sensitivity 68

Capital Assets

Long -Term Debt

Changes in Long-Term Debt

General Obligation Bonds

Note Payable to Lake Forest Bank

Note Payable to State of Illinois

Note Payable to Abbott Laboratories

Note Payable to Illinois Environmental Protection Agency

Lawsuit Settlement Liability

April 30, 2015

City of North Chicago, IllinoisIndex for Notes to the Financial Statements (Continued)

-30-

NOTES (Continued) Page

J. Other Postemployment Benefits (OPEB)

1. Plan Description 69

2. Funding Policy 69

3. Annual OPEB Cost and Net OPEB Obligation 70

4. Trend Information 70

5. Funding Policy and Actuarial Assumptions 71

K. Restrictions by Enabling Legislation 72

L. Risk Management - Self-Insured Dental and Vision 72

M. Other Commitments and Contingencies

1. Litigation 73

2. Grants 73

N. Significant Future Accounting Pronouncements 73

O. Subsequent Events 73

April 30, 2015

City of North Chicago, IllinoisIndex for Notes to the Financial Statements (Continued)

-31-

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Reporting Entity

(a)

(b) Fiscal dependency on the primary government.

2. New Accounting Pronouncement

City of North Chicago, IllinoisNOTES TO THE FINANCIAL STATEMENTS

April 30, 2015

The financial statements of the City of North Chicago, Illinois, (the City) have been prepared in conformity with

accounting principles generally accepted in the United States of America (GAAP), as applied to government units.

The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing

governmental accounting and financial reporting principles.

The more significant of the City's accounting policies are described below.

As defined by GAAP, the financial reporting entity consists of the primary government, as well as its

component units, which are legally separate organizations for which the elected officials of the City (primary

government) are financially accountable. Financial accountability is defined as:

Appointment of a voting majority of the component unit's board, and either (1) the ability to impose will

by the primary government or (2) the possibility that the component unit will provide a financial benefit

to or impose a financial burden on the primary government; or

Effective for the April 30, 2015 Fiscal Year, the City's Police and Firefighters' Pension Funds have adopted the

provisions of Governmental Accounting Standards Board (GASB) Statement No. 67 Financial Reporting for

Pension Plans, an amendment of GASB Statement No. 25. The objective of this Statement is to improve

financial reporting by state and local governmental pension plans. This Statement replaces the requirements of

Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined

Contribution Plans, and No. 50, Pension Disclosures, as they relate to pension plans that are administered

through trusts or equivalent arrangements that meet certain criteria.

Based on the above criteria, the City does not have any component units.

-32-


April 30, 2015

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

3. Government-wide and Fund Financial Statements

4. Fund Accounting

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment

are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function

or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly

benefit from goods, services, or privileges provided by a given function or segment and 2) grants and

contributions that are restricted to meeting the operational or capital requirements of a particular function or

segment. Taxes and other items not properly included among program revenues are reported instead as general

revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,

even though the latter are excluded from the government-wide financial statements. Major individual

governmental and proprietary funds are reported as separate columns in the fund financial statements.

Nonmajor funds are reported in the supplementary information.

The City uses funds to report on its financial position and the results of its operations. Fund accounting is

designed to demonstrate legal compliance and to aid financial management by segregating transactions related

to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set

of accounts.

Funds are classified into three broad categories: governmental, proprietary, and fiduciary. Each category, in

turn, is divided into separate "fund types."

The government-wide financial statements (i.e., the statement of net position and the statement of activities)

report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund

activity has been removed from these statements. Governmental activities, which normally are supported by

taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a

significant extent on fees and charges for services.

-33-


April 30, 2015


4. Fund Accounting (Continued)

5. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and

the accrual basis of accounting, as are the proprietary fund and fiduciary fund statements. Revenues are

recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related

cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed

by the provider have been met and the availability criteria is met.

Governmental Funds - Governmental funds are used to account for all or most of a City’s general activities,

including the collection and disbursement of earmarked monies (special revenue funds), the servicing of general

long-term debt (debt service funds), and the acquisition or construction of capital assets (capital projects

funds). The General Fund is used to account for all activities of the general government not accounted for in

another fund.

Proprietary Funds - Proprietary funds are used to account for activities similar to those found in the private

sector, where the determination of net income is necessary or useful to sound financial administration. Goods

or services from such activities can be provided either to outside parties (enterprise funds) or to other

departments or agencies primarily within the City (internal service funds).

Fiduciary Funds - Fiduciary funds are used to account for assets held on behalf of outside parties, including

other governments, or on behalf of other funds within the City. When these assets are held under the terms of a

formal trust agreement, a trust fund is used (pension trust funds). Agency funds generally are used to account

for assets that the City holds, on behalf of others, as their agent.

Governmental fund financial statements are reported using the current financial resources measurement focus

and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable

and available. Revenues are considered to be available when they are collectible within the current period or

soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers property

taxes as available if they are collected within 60 days of the end of the current fiscal period. A six-month

availability period is used for revenue recognition for all other governmental revenues. Expenditures generally

are recorded when a liability is incurred, as under modified accrual accounting. However, debt service

expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded

when payment is due.

-34-


April 30, 2015


5. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

The City reports the following major governmental funds:

The City reports both of its enterprise funds as major funds, as detailed below:

Additionally, the City reports the following fund types:

The Agency Fund accounts for escrow funds that are held, by the City, on behalf of contractors and

residents.

Property taxes, sales taxes, income taxes, motor fuel taxes, franchise taxes, grant proceeds, interest revenue,

and charges for services revenues associated with the current fiscal period are all considered to be susceptible

to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are

considered to be measurable and available only when cash is received by the City.

The General Fund is the City's primary operating fund. It accounts for all financial resources of the

general government, except those required to be accounted for in another fund.

The Downtown Tax Increment Financing Redevelopment Project Area Fund accounts for the proceeds of

specific revenue sources that are legally restricted to expenditures for the tax increment financing district.

The Water Fund accounts for the provision of water services to the individual residents and commercial

entities of the City. All activities necessary to provide such services are accounted for in this fund,

including, but not limited to, administration, operations, financing and related debt service, and billing and

collections.

The Sewer Fund accounts for the provision of sewer services to the individual residents and commercial

entities of the City. All activities necessary to provide such services are accounted for in this fund,

including, but not limited to, administration, operations, financing and related debt service, and billing and

collections.

Internal Service Funds (proprietary funds) account for dental and vision insurance claims and insurance

premiums of retired employees provided to other funds, on a cost-reimbursement basis.

Pension Trust Funds account for the activities of the accumulation of resources to pay police and

firefighters' pension benefits. Resources are contributed by members at rates fixed by state statutes and by

the City through an annual property tax levy.

-35-


April 30, 2015


5. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

6. Deferred Outflows / Deferred Inflows

7.

In addition to assets, the statement of net position and the governmental funds balance sheet may report

deferred outflows of resources. Deferred outflows of resources represent a consumption of net position / fund

balance that applies to a future period(s). At April 30, 2015, the City has deferred outflows of resources

related to the loss on refunding of bonds. In addition to liabilities, the City may report deferred inflows of

resources. Deferred inflows of resources represent the acquisition of resources that is applicable to a future

reporting period(s). At April 30, 2015, the City's property taxes levied for a future period are reported as

deferred inflows of resources.

Amounts reported as program revenues include 1) charges to customers for goods, services, or privileges

provided, 2) operating grants and contributions, and 3) capital grants and contributions. All taxes are reported

as general revenues.

The City reports unearned and unavailable revenue on its financial statements. Unearned and unavailable

revenue arises when a potential revenue does not meet both the "measurable" and "available" criteria for

recognition in the current period. In subsequent periods, when both revenue recognition criteria are met, or

when the City has a legal claim to the resources, the liability or deferred inflow of resources for unearned or

unavailable revenue is removed from the balance sheet and revenue is recognized. Governmental Funds also

defer revenue recognition in connection with resources received, but not yet earned.

Budgets

Budgets and appropriations are adopted on a basis consistent with GAAP. Annual appropriations are adopted

for the general, special revenue, debt service, capital projects, enterprise, internal service, and pension trust

funds. All annual appropriations lapse at fiscal year-end.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial

statements.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues

and expenses generally result from providing services and producing and delivering goods in connection with a

proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds and

of the City’s internal service funds are charges to customers for sales and services. Operating expenses for

enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and

depreciation on capital assets. All revenues and expenses not meeting this definition are reported as

nonoperating revenues and expenses.

-36-


April 30, 2015


7.

8. Cash and Cash Equivalents

9. Investments

10. Receivables

•

•

•

The recognition of receivables and revenue associated with exchange and nonexchange transactions is as

follows:

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management's

best estimate of the amounts that will not be collected. Management individually reviews all utility receivable

balances that have had a final reading and estimates the portion, if any, of the balance that will not be

collected.

Budgets (Continued)

Derived tax receivables (such as: sales, income, and motor fuel taxes) are recognized when the underlying

exchange has occurred.

Imposed nonexchange receivables (such as: property taxes and fines) are recognized when an enforceable

legal claim has arisen.

Government mandates or voluntary nonexchange transaction receivables (such as: mandates or grants) are

recognized when all eligibility requirements have been met.

For the purpose of reporting cash flows, cash and cash equivalents include cash on hand, demand deposits, and

investments with original maturities of less than three months, from the date of purchase.

Investments are stated at fair value. Short-term investments are reported at cost, which approximates fair

value. Securities traded on a national exchange are valued at the last reported sales price.

The annual appropriation exceeded the annual budget by 1.2%. Budget information is used for comparison to

operations in various schedules as it reflects the operational plans set forth by the City.

-37-


April 30, 2015


10. Receivables (Continued)

11. Interfund Receivables and Payables

12. Inventories

13.

The City participates in federally funded forgivable rehabilitation loan programs that allow citizens to apply

for money designated for the improvement of property, recorded in non major governemental funds. Each loan

provided is subject to various compliance criteria and may be forgiven or partially forgiven under the

provisions of the federal loan programs. The City maintains the loans at a value net of an allowance for

properties in which the repayment is not anticipated. The carrying value of these loans, net of an allowance of

$51,147 reported in other receivables was $297,694 at April 30, 2015. During 2015, Lake County, Illinois

assumed the responsibility for maintaining the federal programs on behalf of the City. Based upon a review of

the outstanding loans and the review of the allowance for loans outstanding $1,001,156 of loans, net of existing

allowances, were forgiven or written off in fiscal 2015.

Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, sidewalks, and

similar items), are reported in the applicable governmental or business-type activities columns in the

government-wide financial statements. Capital assets are defined as having a useful life greater than one year

with an initial, individual cost of more than $5,000, except for infrastructure, which has a capitalization

threshold of $100,000. Capital assets are recorded at historical cost or estimated historical cost if purchased

or constructed. Donated capital assets are recorded at estimated fair market values at the date of donation.

Interfund receivables and payables arise from interfund transactions and are recorded by all funds affected in

the period in which transactions are executed.

Inventories are valued at cost, which approximates market, using the first-in, first-out (FIFO) method. The

costs of governmental fund-type inventories are recorded as expenditures when consumed rather than when

purchased.

The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend

asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects

are constructed. Interest incurred during the construction phase of capital assets of business-type activities is

included as part of the capitalized value of the assets constructed.

-38-


April 30, 2015


13.

Land improvements 20 years

Buildings and improvements 45 years

Infrastructure 15 - 80 years

Library collections 3 - 7 years

Machinery and equipment 5 - 15 years

Underground equipment 45 years

14.

The City values its property held for resale (land and buildings) at the lower of cost or market.

15. Accumulated Unpaid Vacation, Sick Pay, and Other Employee Benefit Amounts

16. Long-Term Obligations

Capital Assets (Continued)

Capital assets are depreciated using the straight-line method over the following useful lives:

Property Held for Resale

It is the City’s policy to permit employees to accumulate earned but unused vacation, sick pay, and other

employee benefits. All unpaid vacation, sick pay, and other employee benefits due in the event of termination

are accrued when incurred in the government-wide and proprietary fund financial statements, in accordance

with the City's policies. If an employee has accumulated hours in excess of 560 hours, all such excess hours

will be paid at one-half the employee's hourly salary, at the beginning of each fiscal year. At April 30, 2015,

the City has $1,773,574 in accumulated unpaid vacation, sick pay, and other employee benefits at the year-end

for governmental fund employees. A liability for these amounts is reported in governmental funds only if they

have matured, for example, as a result of employee termination, resignations and retirements. At April 30,

2015, the City has $148,370 in accumulated unpaid vacation, sick pay, and other employee benefits at the year-

end for proprietary fund employees.

In the government-wide financial statements and proprietary fund types in the fund financial statements, long-

term debt and other long-term obligations are reported as liabilities in the applicable governmental activities or

business-type activities statement of net position. Bond premiums and discounts, as well as issuance costs, are

deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond

premium or discount. Bond issuance costs are expensed in the period incurred.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as

bond issuance costs, during the current period. The face amount of debt issued is reported as other financing

sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt

issuances are reported as other financing uses. Issuance costs are reported as debt service expenditures.

-39-


April 30, 2015


17. Property Tax Revenue

18. Postemployment Healthcare Benefits

19.

20. Fund Balance

a.

b.

Property taxes are recognized when they become measurable and available. Available means due, or past due,

and receivable within the current period and collected no longer than 60 days after the close of the current

period. Taxes collected after this 60-day period are recorded as unearned revenue. Based on the City's

collection experience, it has been determined that no allowance for uncollectible property taxes is necessary.

Retirees are eligible to continue their current level of healthcare benefit coverage if they have at least eight

years of service. Coverage includes health, medical, dental, and life. Once retirees reach age 65, the premium

is reduced to take Medicare coverage into account. The premiums are fully reimbursed by employees who

elect coverage, and no direct costs are incurred by the City.

Use of Estimates

In preparing financial statements, management is required to make estimates and assumptions that affect the

reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the

financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual

results could differ from those estimates.

In the fund financial statements, governmental funds report five components of fund balance: nonspendable,

restricted, committed, assigned, and unassigned.

Nonspendable - includes amounts that cannot be spent because they are either not in spendable form or

legally or contractually required to be maintained intact. The nonspendable in form criteria includes items

that are not expected to be converted to cash such as prepaid items or inventories.

Restricted - refers to amounts that are subject to outside restrictions such as creditors, grantors,

contributors, laws and regulations of other governments, or imposed by law through enabling legislation.

Special revenue funds are by definition restricted for those specified purposes.

Property taxes are levied by the second week of December and are based on the assessed value of property as

determined by the previous January 1. Assessed values are approximately one-third of market value. A

valuation of all real property must be made once every four years. Tax bills for the 2014 levy year are payable

in two installments on or about June 1, 2015 and September 1, 2015.

-40-


April 30, 2015


20. Fund Balance (Continued)

c.

d.

e.

Any fund with a deficit fund balance is classified as unassigned.

NOTE B - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

1.

Committed - refers to amounts that can only be used for specific purposes pursuant to constraints imposed

by formal action of the City's highest level of decision making authority (the City Council). The City

Council commits fund balances by passing a resolution. Amounts committed cannot be used for any

purpose unless the City removes or changes the specific use by taking the same type of formal action it

employed to previously commit those funds. The City has no committed fund balances at April 30, 2015.

Unassigned - refers to all spendable amounts not contained in the other four classifications described

above. In funds other than the general fund, the unassigned classification is used only to report a deficit

balance resulting from overspending for specific purposes for which amounts had been restricted,

committed, or assigned.

Explanation of Certain Differences Between the Governmental Funds Balance Sheet and the Government-wide


The governmental funds balance sheet includes a reconciliation between total fund balances – governmental

funds and net position of governmental activities as reported in the government-wide statement of net position.

One element of that reconciliation explains that “Long-term liabilities, including bonds payable, notes payable,

bond issuance premium, compensated absences payable, capital leases payable, other postemployment benefits,

lawsuit settlement liability, and net pension obligations are not due and payable in the current period.

Therefore, these liabilities are not reported in the current period and, consequently, are not reported in the

governmental funds.” The details of this difference are as follows:

Unless specifically identified, expenditures act to reduce restricted balances first, then committed balances,

next assigned balances, and finally they act to reduce unassigned balances. Expenditures for a specifically

identified purpose will act to reduce the specific classification of fund balance that is identified.

Assigned - refers to amounts that are constrained by the City's intent to be used for a specific purpose, but

are neither restricted or committed. Intent may be expressed by the City Council or the individual the City

Council delegates the authority to assign amounts to be used for specific purposes. The City Council

delegated this authority to the Comptroller. The City has $104,886 in assigned fund balances related to

account payable clearing at April 30, 2015.

-41-


April 30, 2015


(Continued)

1.

General obligation bonds payable $ 21,145,000

Note payable to Lake Forest Bank 115,939

Note payable to Illinois Department of Revenue 1,405,290

Bond issuance premium 683,131

Compensated absences payable 1,773,574

Capital leases 321,640

Other postemployment benefits obligation 114,101

Lawsuit settlement liability 49,100

Net pension obligation 10,229,197

$ 35,836,972

2.

Depreciation expense $ (1,345,127)

Capital outlay 1,651,923

$ 306,796

Explanation of Certain Differences Between the Governmental Funds Balance Sheet and the Government-wide

Statement of Net Position (Continued)

Net adjustment to increase net change in fund balances - total

governmental funds to arrive at change in net position - governmental

activities

Another element of that reconciliation states that "The issuance of long-term debt provides current financial

resources to governmental funds, while the repayment of the principal of long-term debt consumes the current

financial resources of governmental funds. Also, governmental funds report the effect premiums, discounts,

and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement

of activities." The details of this difference are as follows:

Net adjustment to reduce total fund balances - governmental funds to

net position of governmental activities

Explanation of Certain Differences Between the Governmental Funds Statement of Revenues, Expenditures,

and Changes in Fund Balances and the Government-wide Statement of Activities

The governmental funds statement of revenues, expenditures, and changes in fund balances includes a

reconciliation between net change in fund balances – total governmental funds and change in net position -

governmental activities as reported in the government-wide statement of activities. One element of that

reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the

statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as

depreciation expense.” The details of this difference are as follows:

-42-


April 30, 2015


(Continued)

2.

Principal retirement of long-term debt $ 7,865,038

Issuance of long-term debt (6,327,209)

Bond issuance premium (535,135)

$ 1,002,694

Net compensated absences $ (155,418)

Amortization of bond issuance premium 116,669

Net other postemployment benefits obligation (2,140)

Lawsuit settlement liability 1,500

Net fire and police pension fund obligation (1,823,901)

$ (1,863,290)

Another element of that reconciliation states that "Some expenses reported in the statement of activities do not

require the use of current financial resources and, therefore, are not reported as expenditures in governmental

funds." The details of this difference are as follows:

Net current adjustment to decrease net change in fund balances - total

funds to arrive at change in net position - governmental activities

Net long-term debt adjustment to increase net change in fund balances -

funds to arrive at change in net position - governmental activities

Explanation of Certain Differences Between the Governmental Funds Statement of Revenues, Expenditures,

and Changes in Fund Balances and the Government-wide Statement of Activities (Continued)

-43-


April 30, 2015

NOTE C - DEPOSITS AND INVESTMENTS

-

-

- Obligations of the U.S. Treasury or its agencies.

-

- Money Market Mutual Funds registered by the SEC.

- The Illinois Funds.

- State of Illinois Public Treasurer's Investment Pool.

-

- Any investments authorized by the Public Funds Investment Act.

The City maintains a cash and investment pool that is available for use by most funds. The City's portion of this

pool is displayed on the combined balance sheet as "cash and cash equivalents". The City is authorized by its own

local ordinances and state statutes, to invest in the following:

Short-Term Obligations of Corporations organized in the United States with assets exceeding $500,000,000.

Certificates of Deposit insured up to $250,000 by the Federal Deposit Insurance Corporation or

appropriately collateralized.

Saving Accounts insured up to $250,000 by the Federal Deposit Insurance Corporation or appropriately

collateralized.

The deposits and investments of the pension funds are held separately from those of other City funds. Statutes and

the pension funds' investment policies authorize the pension funds to make deposits/invest in interest-bearing direct

obligations of the United States of America; obligations that are fully guaranteed or insured as to the payment of

principal and interest by the United States of America; bonds, notes, debentures, or similar obligations of agencies

of the United States of America; savings accounts or certificates of deposit issued by banks or savings and loan

associations chartered by the United States of America or by the state of Illinois, to the extent that the deposits are

insured by the agencies or instrumentalities of the federal government; credit unions, to the extent that the deposits

are insured by the agencies or instrumentalities of the federal government; state of Illinois bonds; pooled accounts

managed by the Illinois Public Treasurer, or by banks, their subsidiaries or holding companies, in accordance with

the laws of the state of Illinois.

Statutes and the pension funds Investment policies also authorize the pension funds to make deposits/invest in

bonds or tax anticipation warrants of any county, township, or municipal corporation of the state of Illinois;

direct obligations of the State of Israel; money market mutual funds managed by investment companies that are

registered under the Federal Investment Company Act of 1940 and the Illinois Securities Law of 1953 and are

diversified, open-ended management investment companies, provided that the portfolio is limited to specified

restrictions; general accounts of life insurance companies and separate accounts of life insurance. Pension funds

with net position of $2.5 million or more may invest up to forty-five percent of plan net position in a separate

account of life insurance companies and mutual funds. In addition, pension funds with net position of at least $5

million that have appointed an investment advisor may, through that investment advisor, invest up to forty-five

percent of the plan's net position in common and preferred stocks which meet specific restrictions.

Bonds of the State of Illinois and any local government in the State of Illinois, which bonds have at the time

of investment, one of the three highest credit ratings of a nationally recognized rating agency.

-44-


April 30, 2015

NOTE C - DEPOSITS AND INVESTMENTS (Continued)

As of April 30, 2015, the City's cash, cash equivalents, and investments consisted of the following:

Government-wide Fiduciary Total

$ 22,821,827 $ 25,879,472 $ 48,701,299

Total

Cash on hand $ 5,400

Deposits with financial institutions - City 20,353,512

Deposits with financial institutions - Police and

Firefighters' Pension Funds 1,039,268

Deposits with financial institutions - Temporary

Escrow Fund 1,842

The Illinois Funds - City 2,462,915

Investments - Police and Firefighters'

Pension Funds 24,838,362

Total $ 48,701,299

Cash, cash equivalents, and investments

For disclosure purposes, this amount is segregated into four components: 1) cash on hand; 2) deposits with

financial institutions, which include amounts held in demand accounts, certificates of deposit, and savings

accounts, 3) The Illinois Funds; and 4) other investments, which consist of investments in certificates of deposit,

U.S. Government and agency obligations, money market mutual funds, mutual funds, insurance company

contracts, and equity securities as follows:

-45-


April 30, 2015


As of April 30, 2015, the Police and Firefighters' Pension Funds have the following investments and maturities:

Fair Value Less than 1 1 to 5 6 to 10 More than 10

$ 3,340,549 $ 535,820 $ 1,222,126 $ 1,438,150 $ 144,453

Corporate bonds 1,548,529 - 1,158,300 - 390,229

Money Market Mutual

Funds 3,117,288 3,117,288 - - -

8,006,366 $ 3,653,108 $ 2,380,426 $ 1,438,150 $ 534,682

Equity Mutual Funds 5,167,079

Insurance Company Contracts 5,691,239

Equity Securities 5,973,678

$ 24,838,362

1. Interest Rate Risk

2. Credit Risk

The Firefighters' Pension Fund investment policy limits its exposure to interest rate risk by structuring the

portfolio to "provide liquidity while at the same time matching investment maturities to projected fund

liabilities."

State law limits investments in commercial paper, corporate bonds, and mutual bonds funds to the top two

ratings issued by nationally recognized statistical rating organizations. The City's investment policy imposes

further limits on investment choices and prohibits investments in "derivative" securities and in repurchase

agreements of government securities having the meaning set out in the Government Securities Act of 1986.

Investment Maturities

(In Years)

Investment Type

U.S. Government and

Agency Obligations

The City's investment policy limits investment maturities to no more than two years from the date of purchase

as a means of managing its exposure to fair value losses arising from increasing interest rates. The objective is

to maintain a core portfolio with maturities in the one- to two-year range.

The Police Pension Fund limits its exposure to interest rate risk by structuring the portfolio to provide liquidity

while at the same time matching investment maturities to projected fund liabilities. The Pension Fund does not

have a formal written policy with regards to interest rate risk.

-46-


April 30, 2015


2. Credit Risk (Continued)

3. Custodial Credit Risk

The Illinois Funds, a state investment pool, was rated AAAm by Standard & Poor's. The State Treasurer is

the regulatory oversight agency for the pool and the State Treasurer is audited by the Illinois Auditor General

to ensure that all state statutes are being followed. Each member owns a prorated share of each investment or

deposit, which is held in the name of the fund. The fair value of the position in the external investment pool is

the same as the value of the pool shares.

The Police and Firefighters' Pension Funds limit their exposure to credit risk by primarily investing in

securities issued by the United States Government and/or its agencies that are implicitly guaranteed by the

United States Government. The Pension Funds' investment policy establishes criteria for allowable

investments; those criteria follow the requirements of the Illinois Pension Code. The investments in the

securities of U.S. government and agency obligations were rated AAA by Standard & Poor's and Aaa by

Moody's Investors Service. The Police and Firefighters' Pension Funds' investment policies prescribe to the

"prudent person" rule, which states, "Investments shall be made with judgment and care, under circumstances

then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their

own affairs, not for speculation, but for investment, considering the primary objective of safety as well as the

secondary objective of the attainment of market rates of return."

In the case of deposits, this is the risk that, in the event of a bank failure, the City's deposits may not be

returned. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty,

the City will not be able to recover the value of its investment or collateral securities that are in the possession

of an outside party. The City's investment policy states that deposits should have a collateralization ratio of

110% and securities held by a third-party custodian designated by the Investment Officer and evidenced by

safekeeping receipts. The bank balances of the City's deposits with financial institutions, were not exposed to

custodial credit risk, as they were fully insured or collateralized as of April 30, 2015.

The Police Pension Fund does not have a formal written policy with regards to custodial credit risk for

deposits. The Police Pension Fund's investment policy does not require pledging of collateral for all bank

balances in excess of federal depository insurance, since flow-through FDIC insurance is available for the

Pension Fund's deposits with financial institutions. At April 30, 2015, the entire amount of the bank balance of

the deposits was covered by federal depository insurance or collateralized.

The Firefighters' Pension Fund's investment policy requires pledging of collateral with a fair value of not less

than 110% of all bank balances in excess of federal depository insurance. At April 30, 2015, the entire

amount of the bank balance of the deposits was covered by federal depository insurance or collateralized.

-47-


April 30, 2015


3. Custodial Credit Risk (Continued)

4.

The Police and Firefighters' Pension Fund limits its exposure to custodial credit risk related to investments by

utilizing an independent third party institution, selected by the Pension Fund, to act as custodian for its

securities and collateral.

Concentration of Credit Risk

It is the policy of the City to diversify its investment portfolio. Investments shall be diversified to limit the risk

of loss resulting in overconcentration in a security, maturity, issuer, or class of securities. The City's

investment policy, which is more restrictive than state statute, requires the City to diversify its investments by

security type and institution. With the exception of U.S. Treasury securities and authorized pools (Illinois

Funds), no more than 75% of the City's total investment portfolio will be invested in a single security type or

with a single financial institution.

The Firefighters' Pension Fund's investment policy states "investments of the plan will be diversified so as to

minimize the risk of large losses, unless it is clearly prudent not to do so." At April 30, 2015 the Firefighters'

Pension Fund has over 5%, $472,686, of net position invested in various agency securities and insurance

contract and mutual funds. Agency investments represent a larger portion of the portfolio; however, the

investments are diversified by maturity date and are backed by the issuing organization.

At April 30, 2015, the Police Pension Fund has over 5%, $824,320, of net position invested in various

insurance contracts and mutual funds. The Police Pension Fund does not have a formal written policy with

regards to concentration of credit risk.

-48-


April 30, 2015

NOTE D - INTERFUND RECEIVABLES AND PAYABLES

Due From Due To

Major Governmental Funds

General Fund $ 538,855 $ 92,542

Downtown Tax Incremental Financing Redevelopment Area 182,400 -

Major Enterprise Funds

Water Fund - 216,465

Sewer Fund - 20,609

Internal Service Funds - 116,919

Nonmajor Governmental Funds 174,062 448,782

895,317 895,317

(658,243) (658,243)

$ 237,074 $ 237,074

The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods

and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting

system, and (3) payments between funds are made. Interfund balances are intended to be repaid currently from

other resources of respective funds. Individual interfund balances at April 30, 2015 are shown as follows:

Total internal balances as shown on the statement of net position

Less amounts eliminated during GASB 34 adjustments and net adjustments to

interfund balances

-49-


April 30, 2015

NOTE E - CAPITAL ASSETS

Capital asset activity for the year ended April 30, 2015, was as follows:

1. Governmental Activities

Beginning Ending

Balance Increases Decreases Balance

Capital assets not being depreciated

Land $ 2,831,841 $ - $ - $ 2,831,841

Total capital assets not being

2,831,841 - - 2,831,841

Capital assets being depreciated

Land improvements 397,174 - - 397,174

Buildings and improvements 4,926,622 - - 4,926,622

Infrastructure 22,312,368 1,076,944 634,515 22,754,797

Library collections 737,803 51,000 115,345 673,458

Machinery and equipment 6,903,030 523,979 - 7,427,009

Total capital assets being

depreciated 35,276,997 1,651,923 749,860 36,179,060

Less accumulated depreciation for

Land improvements 177,309 12,564 - 189,873

Buildings and improvements 2,933,950 104,807 - 3,038,757

Infrastructure 10,145,470 601,880 634,515 10,112,835

Library collections 567,901 58,464 115,345 511,020


Total accumulated depreciation 18,480,080 1,345,127 749,860 19,075,347


depreciated, net 16,796,917 306,796 - 17,103,713

Governmental activities capital

assets, net $ 19,628,758 $ 306,796 $ - $ 19,935,554

depreciated

-50-


April 30, 2015

NOTE E - CAPITAL ASSETS (Continued)

2. Business-type Activities

Increases Decreases

Capital assets not being depreciated

Land $ 2,435 $ - $ - $ 2,435

Total capital assets not being

depreciated 2,435 - - 2,435

Capital assets being depreciated

Land improvements 209,813 - - 209,813

Buildings 8,080,800 45,575 - 8,126,375


Underground equipment 15,081,706 - - 15,081,706

Total capital assets being depreciated 40,789,080 169,648 - 40,958,728

Less accumulated depreciation for

Land improvements 99,961 3,337 - 103,298

Buildings 3,901,113 171,540 - 4,072,653


Underground equipment 9,761,922 184,383 - 9,946,305

Total accumulated depreciation 24,773,883 671,153 - 25,445,036


depreciated, net 16,015,197 (501,505) - 15,513,692

Business-type activities capital

assets, net $ 16,017,632 $ (501,505) $ - $ 15,516,127

Beginning

Balance

Ending

Balance

-51-


April 30, 2015

NOTE E - CAPITAL ASSETS (Continued)

3. Depreciation

Depreciation expense was charged to functions/programs of the City as follows:


Administration and general government $ 252,409

Police 201,362

Fire 247,186

Public works 601,880

Library 42,290

Total depreciation expense - governmental activities $ 1,345,127


Water $ 547,409

Sewer 123,744

Total depreciation expense - business-type activities $ 671,153

4. Construction Commitments

The City has certain contracts in various funds for construction projects which were in progress at April 30,

2015. Remaining commitments under these contracts approximated $56,000.

-52-


April 30, 2015

1.

Balance Additions/ Reductions/ Balance Due Within

May 1, 2014 Issuances Retirements April 30, 2015 One Year


General obligation bonds

Series 2005A $ 7,415,000 $ - $ 6,775,000 $ 640,000 $ 640,000

Series 2007A 2,030,000 - 170,000 1,860,000 180,000

Series 2007B 4,740,000 - - 4,740,000 -

Series 2007C 8,185,000 - 290,000 7,895,000 325,000

Series 2014A Refunding - 6,010,000 - 6,010,000 -

Bond issuance

premium 264,665 535,135 116,669 683,131 268,691

Note payable to

Lake Forest Bank 308,629 - 192,690 115,939 115,939

Note payable to State

of Illinois, Office of

the State Fire Marshal 20,000 - 20,000 - -

Lawsuit settlement

liability 50,600 - 1,500 49,100 7,800

Note payable to Illinois

Department of Revenue 1,616,490 - 211,200 1,405,290 211,200

Capital leases 210,579 317,209 206,148 321,640 206,216

Compensated

absences 1,618,156 331,484 176,066 1,773,574 6,482

Other postemploy-

ment benefits 111,961 96,886 94,746 114,101 -

Net fire and police

pension obligation 8,405,296 3,307,273 1,483,372 10,229,197 -

Governmental

activity long-term

liabilities $ 34,976,376 $ 10,597,987 $ 9,737,391 $ 35,836,972 $ 1,961,328

NOTE F - LONG-TERM DEBT

Changes in Long-Term Debt

The following is a summary of the City's long-term debt balances and transactions for the year ended April 30,

2015:

-53-


April 30, 2015

1.

Beginning Additions/ Reductions/ Ending Due Within

Balance Issuances Retirements Balance One Year


General obligation bonds

Series 2005B $ 2,675,000 $ - $ 2,500,000 $ 175,000 $ 175,000

Series 2014B Refunding - 2,275,000 - 2,275,000 -

Bond issuance

premium - 226,635 22,664 203,971 22,664

Note payable to

Abbott Laboratories 339,275 - 58,813 280,462 59,000

Note payable to

Illinois Environ-

mental Protection

Agency 954,942 - 57,876 897,066 57,876

Compensated

absences 151,591 - 3,221 148,370 -

Business-type activity

long-term

liabilities $ 4,120,808 $ 2,501,635 $ 2,642,574 $ 3,979,869 $ 314,540

During the fiscal year ended April 30, 2015, the City issued $6,010,000 and $2,275,000 of General Obligation

Refunding Bonds, Series 2014A (governmental activities) and Series 2014B (business-type activities),

respectively. These bond issuances were used to refund certain principal and interest maturities on the City's

Series 2005 Bond Series A and Series B. This transaction resulted in a theoretical economic gain (difference

between the present value of the debt service payments on the old and new debt) of $541,631 and $250,325,

respectively, related to the refunding bonds.

The City defeased the debt by placing the proceeds of new bonds in escrow to provide for future debt service

payments on the old bonds. Accordingly, the escrow account assets and the liability for the defeased debt are

not included in the City's financial statements. At April 30, 2015, $6,180,000 of governmental activity bonds

and $2,330,000 of business-type bonds principal outstanding are considered defeased.

NOTE F - LONG-TERM DEBT (Continued)

Changes in Long-Term Debt (Continued)

-54-


April 30, 2015

2. General Obligation Bonds


$ 640,000

1,860,000

4,740,000

7,895,000

6,010,000

Total governmental activities general obligation bonds outstanding $ 21,145,000

$9,325,000 General Obligation Bonds, Series 2005A, dated March 10, 2005. Principal is

payable on November 1 of each year. Interest is payable on May 1 and November 1 of each

year at rates from 3.25 to 5.00%.

$2,475,000 General Obligation Bonds, Series 2007A, dated May 9, 2007. Principal is


year at a rate of 4%.

$4,740,000 General Obligation Bonds, Series 2007B, dated May 9, 2007. Principal is

payable on November 1 of each year starting in 2028. Interest is payable on May 1 and

November 1 of each year at rates ranging from 4.30 to 4.35%.

$8,860,000 General Obligation Bonds, Series 2007C, dated August 15, 2007. Principal is


year at rates ranging from 5.39 to 6.01%.

$6,010,000 General Obligation Bonds, Series 2014A Refunding, dated February 4, 2015.

Principal is payable on November 1 of each year. Interest is payable on May 1 and

November 1 of each year at rates ranging from 3.0 to 4.0%,

The City issues general obligation bonds to provide funds for the acquisition and construction of major capital

facilities. General obligation bonds have been issued for both general government and proprietary activities.

These bonds, therefore, are reported in the proprietary funds if they are expected to be repaid from proprietary

revenues. General obligation bonds are direct obligations and pledge the full faith and credit of the City.

General obligation bonds currently outstanding are as follows:


-55-


April 30, 2015

2. General Obligation Bonds (Continued)


175,000

2,275,000

Total business-type general obligation bonds outstanding 2,450,000

$ 23,595,000

Annual debt service requirements to maturity for general obligation bonds are as follows:

Year Ending

April 30, Principal Interest Principal Interest

2016 $ 1,145,000 $ 1,125,198 $ 175,000 $ 146,750

2017 1,235,000 917,610 195,000 82,075

2018 1,370,000 866,272 200,000 76,150

2019 1,475,000 809,635 205,000 70,075

2020 1,580,000 744,407 215,000 62,700

2021-2025 7,020,000 2,569,470 1,195,000 176,300

2026-2030 3,430,000 1,246,053 265,000 5,300

2031-2035 2,455,000 640,195 - -

2036-2038 1,435,000 107,228 - -

Total $ 21,145,000 $ 9,026,068 $ 2,450,000 $ 619,350


Governmental Activities Business-type Activities

$3,860,000 General Obligation Bonds, Series 2005B, dated March 10, 2005. Principal is


year at rates from 3.00 to 5.00%.

Total general obligation bonds outstanding

$2,275,000 General Obligation Bonds, Series 2014B Refunding, dated February 4, 2015.

Principal is payable on November 1 of each year. Interest is payable on May 1 and

November 1 of each year at rates ranging from 3.0 to 4.0%,

-56-


April 30, 2015

3. Note Payable to Lake Forest Bank

Annual debt service requirements to maturity for note payable to Lake Forest Bank is as follows:

Year Ending

April 30, Principal Interest

2016 $ 115,939 $ 1,897

4. Note Payable to State of Illinois

5. Lawsuit Settlement Liability


In November 2009, the City entered into a master commitment with Lake Forest Bank, in the total amount of

$979,973, to be used for financing the acquisition of police vehicles, public works vehicles, and IT hardware

and relocation. In 2011, at the time the City completed the acquisition of each type of equipment, each

equipment acquisition became a five year term note. Principal and interest payments ranging from $12,183 to

$20,701 are due quarterly based on a five year amortization schedule for each term note. Interest is charged at

4.0%. The balance due under these term notes at April 30, 2015 is $115,939.

Governmental Activities

In June 2009, the City entered into an agreement with the State of Illinois under an Ambulance Revolving Loan

Program in the total amount of $100,000 to be used for financing the purchase of an ambulance. The note

required that the City make five annual principal payments of $20,000 through November 2014. The note is

non interest bearing and was paid off in full during fiscal year 2015.

During fiscal year 2006, the City reached a settlement for an alleged wrongful termination of a former

employee. Under this agreement, the City is required to make monthly payments for the rest of the former

employee's life. The estimated present value of these future settlement payments of $49,100 has been recorded

as a liability, at April 30, 2015.

-57-


April 30, 2015

6. Note Payable to Illinois Department of Revenue

Year Ending

April 30, Principal

2016 $ 211,200

2017 211,200

2018 211,200

2019 211,200

2020-2022 560,490

Total $ 1,405,290


In January 2012, the City was notified by the State of Illinois that $2,109,290 in local sales tax was reported to

the Department in error by a retailer in the City. The sales tax was previously distributed by the State to the

City. As such, the City is liable for repayment of the local sales tax to the State. Due to the sizeable amount of

the repayment, a monthly installment repayment plan was accepted. Monthly payments commenced January

2012, with $17,600 for 120 months being deducted from the City's regular monthly sales tax distribution.

Further, under the Economic Development Agreement between Abbott Laboratories Purchasing Company

(ALPC) and the City, the City paid ALPC 50%, or $1,054,645, for the local sales tax refund. As such, the

City considers ALPC liable for 50%, or $1,054,645, for the repayment of the refund to the State. The claim

against the City from the State for $2,109,290 was recorded as a liability. In addition, the City recorded a

receivable from ALPC of $1,054,645, which is the ALPC portion of the amount due back to the State, and

which was paid to the City in full during fiscal year 2013. At April 30, 2015, the City is obligated for future

payments under the note payable as follows:

-58-


April 30, 2015

7. Capital Leases

Year Ending

April 30, Principal

2016 $ 206,216

2017 115,424

Total $ 321,640

8. Note Payable to Abbott Laboratories

9. Note Payable to Illinois Environmental Protection Agency

In April 2013, the City entered into a capital lease agreement with a leasing company for the lease of twelve

vehicles. Monthly principal and interest payments of $8,481 are due over a three year period. Interest is

charged at 4.4%. In December 2013, the City entered into a capital lease agreement with a leasing company

for the lease of a vehicle. Monthly principal and interest payments of $849 are due over a three year period.

Interest is charged at 5.15%. In May 2014, the City entered into a capital lease agreement with a leasing

company for the lease of eight vehicles. Monthly principal and interest payments of $9,328 are due over a three

year period. The balance due under these leases, at April 30, 2015, is $321,640.

At April 30, 2015, the City is obligated for future payments under these leases as follows:


In May 2007, the City entered into an agreement with Abbott Laboratories for the construction of capital

assets at the City's water treatment plant. The total cost of construction was $945,000. The City will repay

this obligation through a reduction of the water rate charged to Abbott Laboratories of $0.25, until repaid in

full. The balance due to Abbott Laboratories, at April 30, 2015, is $280,462. The City estimated the current

portion of this enterprise liability to be $59,000 based on prior history of credits issued ranging between

approximately $55,000 and $113,000.

In December 2009, the City entered into an agreement with the Illinois Environmental Protection Agency

(IEPA) for the IEPA to provide a note payable to the City, in the amount of $1,752,856, to be used to

reimburse the Illinois Department of Transportation (IDOT) for sanitary sewer replacement construction costs.

The City is required to make semi-annual principal payments of $28,927 through October 2030. The note is

non interest bearing. The balance due to IEPA, at April 30, 2015, is $897,066, which is recorded in an

enterprise fund.

-59-


April 30, 2015

NOTE G - INTERFUND TRANSFERS

Transfers In Transfers Out

General Fund

Sewer Fund $ 400,000 $ -

Water Fund 1,600,000 -

Nonmajor Governmental Funds - 42,381

Total General Fund 2,000,000 42,381

Enterprise funds

Sewer Fund

General Fund - 400,000

Nonmajor Governmental Funds 1,169

Water Fund

General Fund - 1,600,000

Total enterprise funds - 2,001,169

Nonmajor Governmental Funds 43,550 -

Total all funds $ 2,043,550 $ 2,043,550

NOTE H - CONCENTRATION OF RISK - REVENUE SOURCE

NOTE I - DEFINED BENEFIT PENSION PLANS

Transfers are used to (1) move revenues from the fund with collection authorization to the capital project fund or

enterprise fund as debt service and interest payments become due or (2) move restricted general fund revenues to

finance various programs that the government must account for in other funds in accordance with budgetary

authorization. Interfund transfers are recorded for permanent transfers between funds which are not expected to

be repaid. Individual interfund transfers, during the fiscal year ended April 30, 2015, were as follows:

The City has one resident business from which it generates a significant amount of property tax and water and

sewer revenue. Without this commercial entity, the City would be forced to obtain new revenue sources to

continue to provide its current level of services.

The City participates in the Illinois Municipal Retirement Fund (IMRF), a statewide multiple-employer, public

employee retirement system which acts as an investment and administrative agent. The IMRF plan covers

substantially all of the City's employees other than police officers and firefighters. The City also maintains two

separate, single-employer retirement plans established by state statute for the City's police officers and firefighters.

-60-


April 30, 2015

NOTE I - DEFINED BENEFIT PENSION PLANS (Continued)

1. Illinois Municipal Retirement Fund

a. Plan Description

b. Funding Policy

c. Annual Pension Cost

Fiscal Annual Percentage Net

Year Pension of APC Pension

Ending Cost (APC) Contributed Obligation

4/30/15 $ 431,392 100% $ -

4/30/14 435,709 100% -

4/30/13 412,951 100% -

The City contributes to the Illinois Municipal Retirement Fund (IMRF), which provides retirement,

disability, and death benefits to plan members and beneficiaries. IMRF is an agent-multiple-employer public

employee retirement system that acts as a common investment and administrative agent for local

governments and school districts in Illinois. All employees, except those covered by the police and fire

pension plans, in positions that meet or exceed the prescribed minimum hours standard must be enrolled in

IMRF as participating members. The Illinois Pension Code establishes the benefit provisions of the plan that

can only be amended by the Illinois General Assembly. IMRF issues a publicly available financial report

that includes financial statements and supplementary information for the plan as a whole, but not for

individual employers. The report may be obtained from the Illinois Municipal Retirement Fund, 2211 York

Road, Suite 500, Oak Brook, Illinois 60521.

As set by statute, the City's regular plan members are required to contribute 4.5% of their annual covered

salary. The statute requires employers to contribute the amount necessary, in addition to member

contributions, to finance the retirement coverage of its own employees. The employer annual required

contribution rate for calendar year 2014 was 10.05%. The City also contributes for disability benefits,

death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level.

Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the

supplemental retirement benefits rate is set by statute.

Information related to the employer's contributions are on a fiscal year basis. The actuarial and trend

information are on a calendar basis as that is the year used by the IMRF. The required contribution for

fiscal year 2015 was $431,392.

Three-Year Trend Information for the Regular Plan

-61-


April 30, 2015


1. Illinois Municipal Retirement Fund (Continued)

c. Annual Pension Cost (Continued)

d. Funded Status and Funding Progress

2. Police and Firefighters' Pension Plans

a. Plan Descriptions

Police Firefighters'

Retirees and beneficiaries currently receiving benefits and terminated

members entitled to but not yet receiving benefits 42 33

Active plan members 55 33

Total participants 97 66

As of December 31, 2014, the most recent actuarial valuation date, the regular plan was 93.54% funded.

The actuarial accrued liability for benefits was $11,941,706 and the actuarial value of assets was

$11,170,622, resulting in an underfunded actuarial accrued liability (UAAL) of $771,084. The covered

payroll for calendar year 2014 (annual payroll of active employees covered by the plan) was $4,284,487,

and the ratio of the UAAL to covered payroll was 18%.

The Police Pension Plan and Firefighters' Pension Plan are contributory single-employer, defined benefit

public employee retirement plans administered by the City and a Board of Trustees for each fund. All

sworn City police officers and firefighters are participants in the Plans. The Plans are not included in the

report of a public retirement system or another entity. Separate reports are issued for the Police Pension

Plan and Firefighters' Pension Plan and may be obtained by writing to the City of North Chicago at 1850

Lewis Avenue, North Chicago, Illinois 60064.

The schedule of funding progress, presented as required supplementary information following the notes to

the financial statements, presents multiyear trend information about whether the actuarial value of plan

assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

The required contribution for 2014 was determined as part of the December 31, 2012 actuarial valuation

using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 2012

included (a) 7.5% investment rate of return (net of administrative and direct investment expenses), (b)

projected salary increases of 4% a year, attributable to inflation, (c) additional projected salary increases

ranging from 0.4% to 10% per year depending on age and service, attributable to seniority/merit, and (d)

postretirement benefit increases of 3% annually. The actuarial value of the City's Regular plan assets was

determined using techniques that spread the effects of short-term volatility in the market value of

investments over a five-year period with a 20% corridor between the actuarial and market value of assets.

The City's Regular plan's unfunded actuarial accrued liability at December 31, 2012 is being amortized as a

level percentage of projected payroll on an open 29 year basis.

-62-


April 30, 2015


2. Police and Firefighters' Pension Plans (Continued)

a. Plan Descriptions (Continued)

The following are summaries of the plans, as provided in the Illinois State Statutes.

b. Summary of Significant Accounting Policies and Plan Asset Matters

The Police Pension Plan and The Firefighters'’Pension Plan provide retirement benefits through two tiers, as

well as death and disability benefits. Covered employees hired before January 1, 2011 (Tier 1), attaining the

age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement

benefit of 1/2 of the monthly salary attached to the rank held at the date of retirement, or for one year prior

to the last day of service, whichever is greater. The annual benefit shall be increased by 2.5% of such salary

for each additional year of service over 20 years of service through 30 years of service, to a maximum of

75% of such salary. Employees with at least eight years but less than 20 years of credited service may retire

at or after age 60 and receive a reduced benefit. The monthly benefit of a police officer or firefighter who

retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first

anniversary date of retirement and be paid upon reaching the age of at least 55 years, by 3.00% of the

original pension and 3.00% compounded annually thereafter.

Tier 2 employees (those hired on or after January 1, 2011) attaining the age of 55 or older with 10 or more

years of creditable service are entitled to receive an annual retirement benefit equal to the average monthly

salary obtained by dividing the total salary of the firefighter during the 96 consecutive months of service

within the last 120 months of service in which the total salary was the highest by the number of months of

service in that period. Firefighters’ salary for pension purposes is capped at $106,800, plus the lesser of one-

half of the annual change in the Consumer Price Index or 3.00% compounded. The annual benefit shall be

increased by 2.50% of such salary for each additional year of service over 20 years up to 30 years to a

maximum of 75.00% of such salary. Employees with at least 10 years may retire at or after age 50 and

receive a reduced benefit (i.e., 1/2% for each month under 55). The monthly benefit of a Tier 2 firefighter

shall be increased annually at age 60 on the January 1st after the police officer or firefighter retires, or the

first anniversary of the pension starting date, whichever is later. Noncompounding increases occur annually,

each January thereafter. The increase is the lesser of 3.00% or one-half of the change in the Consumer Price

Index for the proceeding calendar year.

The accrual basis of accounting is utilized by the pension trust funds. Under this method, additions to net

position are recorded when earned and deductions from net position are recorded when the time-related

liabilities are incurred. Plan member contributions are recognized in the period in which the contributions

are due. Employer contributions are recognized when due and the employer has made a formal commitment

to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with

the terms of the plan.

-63-


April 30, 2015



b. Summary of Significant Accounting Policies and Plan Asset Matters (Continued)

c. Investments

d.

The City's police employees participate in the Police Pension Employees Retirement System (PPERS).

PPERS functions for the benefit of these employees and is governed by a five-member Pension Board. Two

members appointed by the City's Mayor, one elected pension beneficiary, and two elected police employees

constitute the pension board. The City and PPERS participants are obligated to fund all plan costs based

upon actuarial valuations. The State of Illinois is authorized to establish benefit levels and the City is

authorized to approve the actuarial assumptions used in the determination of contribution levels. The

PPERS is included in the City's annual financial report and is reported as a pension trust fund. A copy of

this pension plan audit may be obtained from the City.

The City's firefighter employees participate in the Firefighters' Pension Plan. The Plan functions for the

benefit of these employees and is governed by a five-member Pension Board. Two members are appointed

by the City's Mayor, two are elected from active participants of the Fund, and one is elected from the retired

members of the Fund. The City and the plan participants are obligated to fund all plan costs based upon

actuarial valuations. The state of Illinois is authorized to establish benefit levels and the City is authorized

to approve the actuarial assumptions used in the determination of contribution levels. The Plan is included

in the City's annual financial report and is reported as a pension trust fund. A copy of this pension plan

audit may be obtained from the City.

Police and Firefighters' Pension Fund investments are reported at fair value. Short-term investments are

reported at cost, which approximates fair value. Securities traded on national exchanges are reported at the

last reported sales price. Investments that do not have an established market value, if any, are reported at

estimated fair value.

Actuarial Assumptions

The actuarial assumptions for the Police Pension Fund included (a) 7.0% investment rate of return,

compounded annually including a 3.0% inflation factor, (b) projected salary increase of 4.0%, compounded

annually including a 3.0% inflation factor, and (c) cost of living increases of 3.0% compounded annually.

The actuarial cost method was entry age normal. The amortization method was level dollar, closed. The

amortization period was 24 years. The asset valuation method was a five-year smoothed market value

method.

The actuarial assumptions for the Firefighters' Pension Fund included (a) 7.0% investment rate of return,

compounded annually including a 3.0% inflation factor and (b) projected salary increase of 4.5%,

compounded annually including a 3.0% inflation factor. The actuarial cost method was entry age normal.

The amortization method was level of percent of pay, closed. The amortization period was 27 years. The

asset valuation method was a five-year smoothed market value method.

-64-


April 30, 2015



e. Contributions

Police Firefighters Total

Annual required contribution $ 1,946,886 $ 1,024,176 $ 2,971,062

Interest on net pension obligation 227,171 109,040 336,211

Annual pension cost 2,174,057 1,133,216 3,307,273

Contributions made (871,239) (612,133) (1,483,372)

Increase in net pension obligation 1,302,818 521,083 1,823,901

Net pension obligation at May 1, 2014 5,679,287 2,726,009 8,405,296

Net pension obligation at April 30, 2015 $ 6,982,105 $ 3,247,092 $ 10,229,197

Covered employee are required to contribute 9.91% of their pensionable salary to the Police Pension Plan

and 9.455% of a firefighter's salary to the Firefighters' Pension Plan. If an employee leaves covered

employment with less than 20 years of service, accumulated employee contributions may be refunded

without accumulated interest. The City is required to contribute the remaining amounts necessary to finance

the Plans as actuarially determined by an enrolled actuary. However, effective January 1, 2011, ILCS

requires the City to contribute a minimum amount annually calculated using the projected unit credit

actuarial cost method that will result in the funding of 90% of the past service cost by the year 2040.

The City's annual pension cost and net pension obligation to the Police and Firefighters' Pension Funds were

estimated from the funds' most recent actuarial valuations (April 30, 2013) performed by the City's actuary

and estimate of the actuary through April 30, 2015 as follows:

The above net pension obligation figures were derived from the most recent actuarial report prepared by the

Plans' independent actuary. The difference between the total amount funded and the amount to be funded,

as actuarially determined, is recorded as the net pension obligation in the statement of net position.

-65-


April 30, 2015



f. Funded Status and Funding Progress

g. Three-Year Trend Information - Pension Trust Funds

Percentage

Fiscal Year Annual Pension of APC Net Pension

Ending Cost (APC) Contributed Obligation

Police 04/30/15 $ 2,174,057 33.8% $ 7,117,654

04/30/14 1,998,414 37.8% 5,679,287

04/30/13 1,768,974 42.6% 4,416,563

Firefighters' 04/30/15 $ 1,133,216 49.2% $ 3,301,843

04/30/14 1,061,972 54.4% 2,726,009

04/30/13 907,776 64.1% 2,221,419

As of April 30, 2013, the most recent actuarial valuation date, the Police Pension's plan was 43.42 percent

funded. The actuarial accrued liability for benefits was $39,826,406, and the actuarial value of assets was

$17,292,310, resulting in an unfunded actuarial accrued liability (UAAL) of $22,534,096. The covered

payroll (annual payroll of active police officers covered by the plan) was $4,049,319, and the ratio of the

UAAL to the covered payroll was 556.49%.

As of April 30, 2013, the most recent actuarial valuation date, the Firefighters' Pension plan was 38.70

percent funded. The actuarial accrued liability for benefits was $23,592,246, and the actuarial value of

assets was $9,131,091, resulting in a UAAL of $14,461,155. The covered payroll (annual payroll of active

firefighters covered by the plan) was $1,808,447, and the ratio of the UAAL to the covered payroll was

799.64%.

The schedules of funding progress, presented as Required Supplementary Information (RSI) following the

notes to the financial statements, presents multiyear trend information about whether the actuarial value of

net position is increasing or decreasing over time relative to the actuarial accrued liability for benefits.

The above net pension obligation figures were derived from the most recent actuarial report prepared by the

City's independent actuary.

-66-


April 30, 2015



h. Net Pension Liability

The components of the net pension liability as of April 30, 2015 are as follows:

Police Firefighters

Total pension liability $ 69,672,984 $ 36,418,543

Plan fiduciary net position 16,486,406 9,453,712

Employer's net pension liability $ 53,186,578 $ 26,964,831

Plan fiduciary net position as a percentage of the

total pension liability 23.66% 25.96%

i. Actuarial Assumptions

Police Firefighters

Actuarial valuation date April 30, 2015 April 30, 2015

Actuarial cost method Entry age

normal;

Entry age

normal;

Level % of

pay

Level % of

pay

Asset valuation method Market value Market value

Assumptions

Interest rate 7.00% 7.00%

Discount rate 3.95% 4.21%

Salary increases 4.50 - 8.00% 5.00%

Cost of living adjustments 3.00% 3.00%

Inflation 3.00% 3.00%

The total pension liability above was determined by an actuarial valuation performed as of April 30, 2015,

using the following actuarial methods and assumptions.

Mortality rates are based on rates developed in the Lauterbach & Amen, LLP 2012 Mortality Table for Illinois

Police and Firefighters, respectively.

-67-


April 30, 2015



j. Discount Rate

k. Discount Rate Sensitivity

Police Pension Fund

Current

1% Decrease Discount Rate 1% Increase

(2.95%) (3.95%) (4.95%)

64,840,476 53,186,578 43,853,471

Firefighters' Pension Fund

Current

1% Decrease Discount Rate 1% Increase

(3.21%) (4.21%) (5.21%)

33,042,114 26,964,831 22,087,550

The discount rate used to measure the total pension liability was 3.95% for Police and 4.21% for

Firefighters, the same as the prior valuation. The projection of cash flows used to determine the discount

rate assumed that member contributions will be made at the current contribution rate and that City

contributions will be made at rates equal to the difference between the actuarially determined contribution

rates and the member rate. Based on those assumptions, the Pension Fund's fiduciary net position was

projected to be available to make all project future benefit payments of current plan members. Therefore, the

long-term expected rate of return on pension plan investments was applied to all period of projected benefit

payments to determine the total pension liability.

The following is a sensitivity analysis of the net pension liability to changes in the discount rate. The table

below presents the pension liability of the City calculated using the discount rate of 3.95% for Police and

4.21% for Firefighters as well as what the City's net pension liability would be if it were calculated using a

discount rate that is one percentage point lower or one percentage point higher than the current rate:

Net Pension Liability

Net Pension Liability

-68-


April 30, 2015

NOTE J - OTHER POSTEMPLOYMENT BENEFITS (OPEB)

1. Plan Description

At April 30, 2015 (most recent date available), membership in the Plan consisted of the following:

Membership

Retirees 22

Actives fully eligible to retire 16

Actives not fully eligible to retire 152

Total membership 190

2. Funding Policy

To be eligible for benefits under the plan, an employee must qualify for retirement under one of the City's

retirement plans. Elected officials are eligible for benefits if they qualify for retirement through the Illinois

Municipal Retirement Fund.

All health care benefits are provided through the City's self-insured health plan. The benefit levels are the

same as those afforded to active employees. Benefits include general inpatient and outpatient medical services;

mental, nervous, and substance abuse care; vision care; dental care; and prescriptions. Upon a retiree reaching

Medicare eligible age, Medicare becomes the primary insurer and the City's plan becomes secondary.

The City negotiates the contribution percentages between the City and employees through the union contracts

and personnel policy. All retirees contribute 100% of the premium to the health insurance plan and the City

contributes the remainder to cover the cost of providing the benefits to the retirees via the self-insurance plan

(pay-as-you-go). Since the City is self-insured, this amount fluctuates on an annual basis. For the fiscal year

ended April 30, 2015, estimated employer contributions are $94,746. Active employees do not contribute to

the plan until retirement.

The City provides postemployment health care insurance benefits (OPEB) for retired employees through a

single-employer defined benefit plan. The benefits, benefit levels, employee contributions, and employer

contributions are governed by the City and can be amended by the City through its personnel manual and union

contracts. The plan is an unfunded plan, and there is no separately issued report.

-69-


April 30, 2015

NOTE J - OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)

3. Annual OPEB Cost and Net OPEB Obligation

Amount

Annual Required Contribution (ARC) $ 96,140

Interest on net OPEB obligation 4,478

Adjustment to Annual Required Contribution (3,732)

Annual OPEB cost 96,886

Contributions made (94,746)

Increase in OPEB obligation 2,140

Net OPEB obligation at May 1, 2014 111,961

Net OPEB obligation at April 30, 2015 $ 114,101

4. Trend Information

Fiscal Annual Percentage Net

Year OPEB of OPEB OPEB

Ending Cost Contributed Obligation

04/30/15 $ 96,886 97.79% $ 114,101

04/30/14 49,303 53.07% 111,961

04/30/13 48,413 54.05% 88,825

The City had an actuarial valuation performed for the plan as of April 30, 2015. The City's annual other

postemployment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the

employer. The contribution represents a level of funding that, if paid on an ongoing basis, is projected to cover

the normal cost each year and to amortize any unfunded actuarial liabilities or funding excess over a period not

to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year,

the amount actually contributed to the plan, and changes in the City's net OPEB obligation to the City's Health

Insurance Plan for Retired Employees as of April 30, 2015.

The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB

obligation for fiscal year 2015 are as follows:

Trend Information - Other Postemployment Benefits

-70-


April 30, 2015

NOTE J - OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)

5. Funding Policy and Actuarial Assumptions

30 years

N/A

4.00%

4.00%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions

about the probability of occurrence of events far into the future. Examples include assumptions about future

employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the

Plan and the annual required contributions of the employer are subject to continual revision as actual results

are compared with past expectations and new estimates are made about the future.

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as

understood by the employer and the plan members) and include the types of benefits provided at the time of

each valuation and the historical pattern of sharing of benefit costs between the employer and the plan

members to that point. The actuarial methods and assumptions used include techniques that are designed to

reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,

consistent with the long-term perspective of the calculations.

The following simplifying assumptions were made:

Measurement date May 1, 2014

Actuarial cost method

Amortization period Level dollar-open

Remaining amortization period

Entry age normal

Asset valuation method

Actuarial assumptions:

Discount rate

Salary rate increase

Healthcare inflation rate

Mortality, Turnover, Disability, Retirement Ages Similar rates utilized for

IMRF, Police and Fire Pension

Percentage of active employees assumed to elect

benefit 15%

6.00% initial; 5.00% ultimate

-71-


April 30, 2015

NOTE K - RESTRICTIONS BY ENABLING LEGISLATION

$ 1,987,309

48,308

450,254

446,317

134,483

116,230

366,477

Total government-wide net position restricted by

$ 3,549,378

2015 2014

$ 14,659 $ 21,914

135,758 136,229

(137,614) (143,484)

$ 12,803 $ 14,659

The government-wide statement of net position reports $4,214,687 of net position restricted by enabling legislation

which consists of the following:

Road maintenance (Motor Fuel Tax)

Emergency phone

not yet reported (IBNRs)

Claim payments

Unpaid claims, end of fiscal year

Project Area Debt Series 2005A

Downtown Tax Increment Financing Redevelopment

Project Area Debt Series 2007A


Project Area Debt Series 2007B

Grant Place Retail Center Debt Service 2007C

enabling legislation

NOTE L - RISK MANAGEMENT - SELF-INSURED DENTAL AND VISION

The City has established a self-insurance fund (as an internal service fund). Each participating operating fund of

the City makes payments to the self-insurance fund for amounts which are necessary to fund claims. Such

payments are displayed on the financial statements as revenues and expenditures/expenses (quasi-external

transfers).

The City self-insures dental and vision insurance claims up to $1,000 and $350 per covered employee per year,

respectively. The City accounts for this health insurance activity in the separate Dental and Vision Fund. As of

the date of this report, the City has accrued $12,803 in the Dental and Vision Fund relating to the City's estimate

of losses resulting from these claims.

Balances of claims liabilities during the past two years are as follows:

Unpaid claims, beginning of fiscal year

Incurred claims including claims incurred but


Drug law enforcement

-72-


April 30, 2015

NOTE M - OTHER COMMITMENTS AND CONTINGENCIES AND SUBSEQUENT EVENT

1. Litigation

2. Grants

NOTE N - SIGNIFICANT FUTURE ACCOUNTING PRONOUNCMENTS

NOTE O - SUBSEQUENT EVENTS

There are several pending lawsuits in which the City is involved. Management estimates that the potential

claims against the City not covered by insurance resulting from such litigation would not materially affect the

financial statements of the City. The City has been involved in an ongoing legal case for several years that was

settled subsequent to year end. The settlement calls for payment of $3,000,000 to the plaintiffs, which is

covered by insurance carried by the City.

Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies,

principally the federal government. Any disallowed claims, including amounts already collected, may

constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by

the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.

GASB has issued Statement No. 68, Accounting and Financial Reporting for Pensions, which will be

implemented by the District during the fiscal year ended April 30, 2016. This Statement established standards for

measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and

expense/expenditures on the government wide financial statements. For defined benefit pensions, this Statement

identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit

payments to their actuarial present value, and attribute the present value to periods of employee service.

GASB has issued Statement No. 71, Pension Transition For Contributions Made Subsequent to the

Measurement Date - an Amendment of GASB Statement No. 68 , and will also be implemented by the District

during the fiscal year ended April 30, 2016. This Statement established standards for measuring amounts

associated with contributions, if any, made by a state or local government employer or nonemployer contributing

entity to a defined benefit pension plan after the measurement date of the government's beginning net pension

liability.

Specific changes to the District's financial statements will relate to the recognition of net pension liability, deferred

outflows of resources, deferred inflows of resources, and pension expense. The most significant effect of this

statement will be the requirement that the City record the net pension liability related to the Illinois Municipal

Retirement Fund, the Police Pension Fund, and the Firefighters Pension Fund as part of long-term liabilities in the

statement of net position (see Note I). The District anticipates that the adoption of these statements will have a

significant negative impact on the April 30, 2016 the government-wide financial statements.

Management has evaluated subsequent events through January 5, 2016, the date these financial statements were

available to be issued. Management has determined that no events or transactions, other than the item noted in

Note M above, have occurred subsequent to the statement of net position/balance sheet date that require disclosure

in the financial statements.

-73-

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

Actuarial UAAL as a

Accrued Percentage

Actuarial Liability Unfunded of

Actuarial Value of (AAL) AAL Funded Covered Covered

Valuation Assets - Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) (b-a)/c

12/31/2014 $ 11,170,622 $ 11,941,706 $ 771,084 93.54 % $ 4,284,487 18.00 %

12/31/2013 10,221,989 10,772,146 550,157 94.89 4,271,618 12.88

12/31/2012 9,586,722 10,680,476 1,093,754 89.76 4,209,166 25.99

The actuarial value of assets and accrued liabilities cover active and inactive members who have service

credit with the City of North Chicago. They do not include amounts for retirees. The actuarial accrued

liability for retirees is 100% funded.

On a market value basis, the actuarial value of assets, as of December 31, 2014, is $13,182,737. On a

market basis, the funded ratio would be 110.39%.


April 30, 2015

Illinois Municipal Retirement Fund

Schedule of Funding Progress


-74-

Actuarial UAAL as a

Accrued Unfunded Percentage

Actuarial Liability (Overfunded) of

Actuarial Value of (AAL) AAL Funded Covered Covered

Valuation Assets - Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) (b-a)/c

Police Pension Fund

04/30/2014 $ 17,267,009 $ 42,959,117 $ 25,692,108 40.19 % $ 4,338,781 592.15 %

04/30/2013* 17,292,310 39,826,406 22,534,096 43.42 4,049,319 556.49

04/30/2012 17,566,456 37,365,786 19,799,330 47.01 3,827,229 517.33

04/30/2010 15,868,797 35,442,843 19,574,046 44.77 3,718,278 526.43

04/30/2009 14,218,573 33,216,472 18,997,899 42.81 3,816,530 497.78

04/30/2008 17,857,666 31,672,442 13,814,776 56.38 3,767,311 366.70


04/30/2014 $ 9,373,761 $ 24,641,328 $ 15,267,567 38.04 % $ 2,266,938 673.49 %

04/30/2013* 9,131,091 23,592,246 14,461,155 38.70 1,849,137 782.05

04/30/2012 9,018,550 20,568,832 11,550,282 43.85 2,014,259 573.43

04/30/2011 8,819,917 18,301,438 9,481,521 48.19 1,919,171 494.04

04/30/2010 8,761,910 17,156,162 8,394,252 51.07 1,857,776 451.84

04/30/2008 8,813,089 14,918,043 6,104,954 59.08 1,737,103 351.44

* Most recent actuarial valuation date

Note: April 30, 2011 Police Pension Fund and April 30, 2009 Firefighters' Pension Fund information is

not available.


April 30, 2015


Police Pension Fund and Firefighters' Pension Fund

Schedules of Funding Progress

-75-

Police Pension Fund

Total pension liability

Service cost $ 1,964,836

Interest on the total pension liability 2,616,283

Benefit payments and refunds (2,286,321)

Net change in total pension liability 2,294,798

Total pension liability, beginning 67,378,186

Total pension liability, ending $ 69,672,984

Plan fiduciary net position

Contributions, employer $ 871,239

Contributions, employee 449,402

Net investment income 854,259

Benefit payments, including refunds of employee contributions (2,286,321)

Administrative expense (54,680)

Net change in plan fiduciary net position (166,101)

Plan fiduciary net position, beginning 16,652,507

Plan fiduciary net position, ending $ 16,486,406

Net pension liability (asset) $ 53,186,578

Plan fiduciary net position as a percentage of the total pension liability 23.66 %

Covered Valuation Payroll $ 4,321,523

Net pension liability as a percentage of covered valuation payroll 1,230.74 %


Schedule of Changes in Net Pension Liability and Related Ratios

Police Pension Fund

April 30, 2015

Note: The Police Pension Fund implemented GASB 67 beginning with it's fiscal year ended April 30, 2015;

therefore, 10 years of information is not available.

-76-


Total pension liability

Service cost $ 1,075,887

Interest on the total pension liability 1,454,398

Benefit payments and refunds (1,316,005)

Net change in total pension liability 1,214,280

Total pension liability, beginning 35,204,263

Total pension liability, ending $ 36,418,543

Plan fiduciary net position

Contributions, employer $ 612,133

Contributions, employee 221,905

Net investment income 580,526

Benefit payments, including refunds of employee contributions (1,316,005)

Administrative expense (47,171)

Net change in plan fiduciary net position 51,388

Plan fiduciary net position, beginning 9,402,324

Plan fiduciary net position, ending $ 9,453,712

Net pension liability (asset) $ 26,964,831

Plan fiduciary net position as a percentage of the total pension liability 25.96 %

Covered Valuation Payroll $ 2,267,983

Net pension liability as a percentage of covered valuation payroll 1,188.93 %


Schedule of Changes in Net Pension Liability and Related Ratios


April 30, 2015

Note: The Firefighters' Pension Fund implemented GASB 67 beginning with it's fiscal year ended April 30,

2015; therefore, 10 years of information is not available.

-77-

Police Pension Fund

Calendar Year Actuarially Contribution Covered Actual Contribution

Ending Determined Actual Deficiency Valuation as a % of

December 31, Contribution Contribution (Excess) Payroll Covered Valuation Payroll

2014 $ 2,252,422 * $ 871,239 $ 1,381,183 $ 4,321,523 20.16 %

Notes to the Required Supplementary Information:

Actuarial Cost Method Entry Age Normal (Level% Pay)

Amortization Method Level % Pay (Closed)

Amortization Target 90% Funded in year 2040

Asset Valuation Method 5-Year Smoothed Market Value

Inflation 2.50%

Salary Increases 1.1220% - 4.8611%

Investment Rate of Return 7.00%

Retirement Age See the Noted to the Financial Statements

Mortality

* Estimated based on contribution rate of 10.65% and covered valuation payroll of $1,474,629.


Schedule of Contributions

Police Pension Fund

April 30, 2015

Note: The Police Pension Fund implemented GASB 67 beginning with it's fiscal year ended April 30, 2015;

therefore, 10 years of information is not available.

RP-2000 Combined Healthy Mortality Table (male) with blue collar

adjustment and with a 200% load for participants under age 50 and

125% for participants age 50 and over.

-78-


Fiscal Actuarially Contribution Covered Actual Contribution

Year Determined Actual Deficiency Valuation as a % of

April 30, Contribution Contribution (Excess) Payroll Covered Valuation Payroll

2015 $ 1,024,176 * $ 612,133 $ 412,043 $ 2,267,983 26.99 %

Notes to the Required Supplementary Information:

Actuarial Cost Method Entry Age Normal (Level% Pay)

Amortization Method Level % Pay (Closed)

Amortization Target 100% Funded in year 2040

Asset Valuation Method 5-Year Smoothed Market Value

Inflation 3.00%

Salary Increases 5.00%

Investment Rate of Return 7.00%

Retirement Age See the Noted to the Financial Statements

Mortality Lauterbach & Amen, LLP 2012 Mortality Table for Illinois Firefighters

* Estimated based on contribution rate of 10.65% and covered valuation payroll of $1,474,629.


Schedule of Contributions


April 30, 2015

Note: The Firefighters' Pension Fund implemented GASB 67 beginning with it's fiscal year ended April 30,

2015; therefore, 10 years of information is not available.

-79-

Annual Money-

Weighted Rate

of Return, Net

Fiscal of Investment

Year Expense

Police Pension Fund

2015 4.78%


2015 6.05%


Schedule of Investment Returns

Police Pension Fund and Firefighters' Pension Fund

April 30, 2015

Note: The Police and Firefighters' Pension Funds implemented GASB 67 beginning with it's fiscal year

ended April 30, 2015; therefore, 10 years of information is not available.

-80-

Actuarial

Accrued

Actuarial Liability Unfunded

Actuarial Value of (AAL) AAL Funded

Valuation Assets - Entry Age (UAAL) Ratio

Date (a) (b) (b-a) (a/b)

04/30/2015 $ - $ 1,354,848 $ 1,354,848 0.00 %

4/30/20141 - 623,220 623,220 0.00

4/30/20131 - 623,220 623,220 0.00

No valuation was performed for fiscal years ended April 30, 2014 or April 30, 2013.

1 Results from last available actuarial study.


April 30, 2015

Other Postemployment Benefits

Schedule of Funding Progress


-81-

Original

and Final Variance from

Budget Actual Final Budget

Revenues

Property taxes $ 5,982,970 $ 5,999,400 $ 16,430

Taxes - other 4,130,000 4,327,303 197,303

Licenses and permits 591,500 601,273 9,773

Intergovernmental 6,095,000 6,137,125 42,125

Grants 440,144 641,148 201,004

Fines and fees 3,054,695 2,795,746 (258,949)

Interest 1,000 3,970 2,970

Miscellaneous 136,230 239,538 103,308

Total revenues 20,431,539 20,745,503 313,964

Expenditures

General government

Mayor's office 425,545 301,860 123,685

City Clerk's office 221,355 170,580 50,775

Legislative 192,709 185,144 7,565

City Treasurer 41,632 28,904 12,728

Comptroller 1,027,177 596,392 430,785

Information technology 467,265 326,338 140,927

Human resources 262,786 203,731 59,055

Building and community development 423,689 535,411 (111,722)

Buildings and grounds department 232,000 265,588 (33,588)

Total general government 3,294,158 2,613,948 680,210

Administration services 3,877,087 3,431,630 445,457

Highway and streets 1,531,281 1,274,994 256,287

(Continued)


General Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual


-82-

Original



Expenditures (continued)

Public safety

Police department $ 8,590,038 $ 9,593,219 $ (1,003,181)

Fire department 4,112,559 4,533,358 (420,799)

Total public safety 12,702,597 14,126,577 (1,423,980)

Economic development

Economic development department 376,733 268,350 108,383

Economic development incentive 841,271 918,483 (77,212)

Total economic development 1,218,004 1,186,833 31,171

Debt service 211,000 211,000 -

Total expenditures 22,834,127 22,844,982 (10,855)

Deficiency of revenues

over expenditures (2,402,588) (2,099,479) 303,109

Other financing sources

Proceeds from capital lease - 317,209 (317,209)

Transfers in 2,000,000 1,957,619 42,381

Total other financing sources 2,000,000 2,274,828 (274,828)

Net change in fund balance $ (402,588) 175,349 $ 28,281

Fund balance, beginning of year 11,630,769

Fund balance, end of year $ 11,806,118

(Concluded)

General Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Continued)



-83-

Original



Revenues

Interest $ 400 $ 168 $ (232)

Miscellaneous - 118 118

Total revenues 400 286 (114)

Expenditures

General government

Other professional services 100,000 51,551 48,449

Total expenditures 100,000 51,551 48,449

Deficiency of revenues

over expenditures $ (99,600) (51,265) $ 48,335

Fund balance, beginning of year 7,687,645

Fund balance, end of year $ 7,636,380


Downtown Tax Increment Financing Redevelopment Project Area Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual


-84-

NOTE A - BUDGETS AND BUDGETARY ACCOUNTING

Public hearings are conducted to obtain taxpayer comments.

Prior to July 31, the appropriation is legally enacted through passage of an ordinance.

Excess of

Original and Expenditures

Fund Final Budget Actual Over Budget

$ 22,834,127 $ 22,887,363 $ 53,236

Community Development Block Grant 375,500 1,327,332 951,832

Downtown Tax Increment Financing

Redevelopment Project Area Debt Series 2005A 948,515 1,137,068 188,553

Delta Institute Emerald Ash Boarer Grant 32,940 32,940

Seized Drug Money - 20,840 20,840

Grant Place Capital - 3,596 3,596

General

All funds also have legally adopted budgets. There were no amendments made to the fiscal year budget.

The level of control (level of which expenditures may not exceed budget/appropriations) is at the fund level.

Budget/appropriations lapse at year-end.

Expenditures (including transfers out) exceeded budgets in the following funds for the year ended April 30,

2015:


Notes to the Required Supplementary Information

The City prepares its appropriation ordinance in accordance with generally accepted accounting principles.

The City follows these procedures in establishing the budgetary data reflected in the financial statements:

Prior to May 15 of each year, the Comptroller submits to the City Council a statement of estimated receipts

and disbursements for the fiscal year commencing May 1. Upon review by the City Council, an

appropriation ordinance is prepared.

April 30, 2015

The legal authorization for expenditures is set by the appropriation ordinance. The annual appropriation

exceeded the annual budget by 10%.

Budget amounts are used in the various budget to actual schedules for comparative purposes.

-85-

SUPPLEMENTARY FINANCIAL INFORMATION

GENERAL FUND

Original



Property taxes

Real estate taxes $ 4,485,840 $ 4,209,360 $ (276,480)

1,497,130 1,790,040 292,910

Total property taxes 5,982,970 5,999,400 16,430

Taxes - other

Hotel/motel tax 140,000 152,694 12,694

Real estate transfer tax 350,000 75,409 (274,591)

Food and beverage tax 250,000 293,552 43,552

Municipal motor fuel tax 415,000 830,085 415,085

Self storage facility tax 30,000 33,387 3,387

Utility tax 1,450,000 1,617,972 167,972

Simplified telecommunications tax 900,000 583,835 (316,165)

Local use tax 500,000 611,661 111,661

Road and bridge tax 45,000 36,828 (8,172)

Pull tabs tax - 200 200

Video gaming tax 50,000 91,680 41,680

Total taxes - other 4,130,000 4,327,303 197,303

Total property taxes and taxes - other 10,112,970 10,326,703 213,733

Licenses and permits

Amusement tax license - 105 105

Contractors license 15,000 12,020 (2,980)

Pet tag license 1,000 821 (179)

Liquor license 35,000 52,175 17,175

Taxi class B license 20,000 23,983 3,983

Business license 100,000 119,680 19,680

Landlord license 25,000 41,140 16,140

Prop. Vacancies registration 10,000 27,600 17,600

(Continued)

Real estate taxes - Firefighters' and

Police pensions


General Fund

Schedule of Revenues and Other Financing Sources - Budget and Actual


-86-

Original



Licenses and permits (continued)

Building permits $ 250,000 $ 185,290 $ (64,710)

Rezoning variance permits 500 2,000 1,500

Miscellaneous permits 10,000 9,790 (210)

Vehicle stickers

Truck 15,000 8,900 (6,100)

Occupancy permits 50,000 59,524 9,524

Hazardous materials permits 40,000 28,000 (12,000)

Taxi A drivers license 20,000 30,245 10,245

Total licenses and permits 591,500 601,273 9,773

Intergovernmental

State income tax 3,050,000 3,037,297 (12,703)

Sales tax 2,785,000 2,790,886 5,886

Replacement tax - state 250,000 305,798 55,798

North Chicago Housing Authority 10,000 3,144 (6,856)

Total intergovernmental 6,095,000 6,137,125 42,125

Grant proceeds 440,144 641,148 201,004

Fines and fees

Lien fees 40,000 81,338 41,338

Animal fines and fees 1,000 5,788 4,788

Photocopies 3,000 4,610 1,610

Code books and maps 1,000 154 (846)

Fire service charges

Ambulance fees 330,000 332,502 2,502

(Continued)


General Fund

Schedule of Revenues and Other Financing Sources - Budget and Actual (Continued)


-87-

Original



Fines and fees (continued)

Policing charges

Police fines $ 10,000 $ - $ (10,000)

Parking fines 20,000 25,277 5,277

Redflex fines 640,000 286,339 (353,661)

Adjudication fines 160,000 161,515 1,515

Adjudication court costs 5,000 4,740 (260)

Police services fees 583,695 576,313 (7,382)

Alarm service fees 10,000 17,328 7,328

Magistrate 250,000 141,748 (108,252)

Building fines and penalties - (7,530) (7,530)

Cable franchise fees 130,000 306,274 176,274

Railroad parking lot pass fees 40,000 14,378 (25,622)

Community day fees 75,000 95,758 20,758

Garbage fees 756,000 749,214 (6,786)

Total fines and fees 3,054,695 2,795,746 (258,949)

Interest 1,000 3,970 2,970

Miscellaneous

90,000 92,664 2,664

Miscellaneous 20,000 100,340 80,340

Worker's compensation reimbursements - 2,581 2,581

Train station lease 16,230 2,700 (13,530)

Rental income - 12,000 12,000

Sale of city property - 28,379 28,379

Donations and contributions - 200 200

Reimbursements 10,000 674 (9,326)

Total miscellaneous 136,230 239,538 103,308

Total revenues 20,431,539 20,745,503 313,964

(Continued)


Cable land use lease

General Fund



-88-

Original



Other financing sources

Proceeds from capital lease $ - $ 317,209 $ 317,209

Transfer in from Water Fund 1,600,000 1,600,000 -

Transfer in from Sewer Fund 400,000 400,000 -

Transfer in from Delta Institute

Emerald Ash Borer Grant Fund - (42,381) (42,381)

Total other financing sources 2,000,000 2,274,828 274,828

Total revenues and other

financing sources $ 22,431,539 $ 23,020,331 $ 588,792

(Concluded)


General Fund



-89-

Original



General government

Mayor's office

Salaries and wages

Full-time salaries and wages $ 259,204 $ 194,885 $ 64,319

Part-time salaries and wages - 5,000 (5,000)

Overtime allowances 3,500 5,141 (1,641)

Comptime used - 5,209 (5,209)

Car allowances - 519 (519)

Total salaries and wages 262,704 210,754 51,950

Fringe benefits

IMRF match 26,050 20,411 5,639

Employer's health insurance 21,496 (11,172) 32,668

Employer's dental and vision insurance 2,215 1,344 871

Social security match 16,071 12,656 3,415

Medicare match 3,758 2,960 798

Life insurance premiums 420 346 74

Total fringe benefits 70,010 26,545 43,465

Contractual services

Maintenance - vehicles 1,000 965 35

Telephone - 534 (534)

Travel and training 20,000 18,519 1,481

Public relations 10,000 522 9,478

Postage 1,000 327 673

Printing and publishing 500 - 500

Other professional services - 296 (296)

Dues and memberships 17,500 9,674 7,826

Total contractual services 50,000 30,837 19,163

Commodities

Office supplies 4,000 3,360 640

Gasoline and oil 2,500 1,707 793

Publications 1,500 - 1,500

(Continued)



Schedule of Expenditures - Budget and Actual

General Fund

-90-

Original



General government (continued)

Mayor's office (continued)

Commodities (continued)

Miscellaneous expenses $ 15,000 $ 24,229 $ (9,229)

Equipment 10,000 - 10,000

Mayor's expense account 5,000 - 5,000

Total commodities 38,000 29,296 8,704

Debt service

Loan principal and interest 4,831 4,428 403

Total debt service 4,831 4,428 403

Total Mayor's office 425,545 301,860 123,685

City Clerk's office

Salaries and wages

Full-time salaries and wages 153,779 121,839 31,940

Gas allowance - 236 (236)


Fringe benefits

IMRF match 15,455 11,997 3,458

Sick leave sell back - 1,654 (1,654)

Employer's health insurance 18,502 13,203 5,299




Life insurance premiums 240 275 (35)


(Continued)

General Fund




-91-

Original




City Clerk's office (continued)


Maintenance - equipment $ 1,000 $ 1,252 $ (252)


Postage 200 58 142

Printing and publishing 8,500 3,621 4,879

Dues and memberships 1,200 904 296


Commodities

Office supplies 3,500 2,541 959

Gasoline and oil 1,500 914 586

Publications 500 - 500

Miscellaneous expenses - 14 (14)


Total City Clerk's office 221,355 170,580 50,775

Legislative

Salaries and wages

Full-time salaries and wages - 965 (965)

Part-time salaries and wages 68,110 63,378 4,732


Fringe benefits

IMRF match 4,824 2,342 2,482



Social security match 4,223 3,423 800

Medicare match 988 801 187



(Continued)

General Fund




-92-

Original




Legislative (continued)


Travel and training $ 22,000 $ 34,788 $ (12,788)

Per diem - 280 (280)

Postage 1,000 - 1,000

Printing and publishing 500 994 (494)

Dues and memberships 4,300 4,622 (322)

Boards and commissions 2,500 383 2,117

Other professional service 9,420 13,482 (4,062)

Total contractual services 39,720 54,549 (14,829)

Commodities

Office supplies 2,450 280 2,170

Publications - 50 (50)

Miscellaneous expenses 15,000 6,512 8,488


Total legislative 192,709 185,144 7,565

City Treasurer

Salaries and wages

Part-time salaries and wages 15,000 15,000 -

Gas allowance - 200 (200)

15,000 15,200 (200)

Fringe benefits

IMRF match 1,508 1,464 44


Employer's dental and vision insurance 738 859 (121)

Social security match 930 882 48

Medicare match 218 206 12



(Continued)


General Fund



-93-

Original




City Treasurer (continued)


Travel and training $ 6,200 $ 3,059 $ 3,141

Printing and publishing 1,000 666 334



Commodities

Office supplies 3,500 191 3,309

Gasoline and oil 1,000 690 310

Miscellaneous expenses 2,000 - 2,000

Total commodities 6,500 881 5,619

Total City Treasurer 41,632 28,904 12,728

Comptroller

Salaries and wages


Holiday taken - 14,720 (14,720)

Comptime used - 26,008 (26,008)


Total salaries and wages 349,440 392,736 (43,296)

Fringe benefits

IMRF match 34,636 35,872 (1,236)

Employer's health insurance 64,836 76,823 (11,987)

Employer's dental and vision insurance 4,430 5,537 (1,107)

Social security match 21,368 22,235 (867)

Medicare match 4,997 5,200 (203)

Life insurance premiums 720 2,499 (1,779)

Total fringe benefits 130,987 148,166 (17,179)

(Continued)

General Fund




-94-

Original




Comptroller (continued)


Maintenance - equipment $ 1,600 $ 11,686 $ (10,086)

Telephone 1,200 615 585

Travel and training 5,200 5,428 (228)

Postage 3,500 82 3,418

Printing and publishing 10,000 9,745 255

Other professional services 5,000 15,705 (10,705)

Dues and memberships 1,500 338 1,162


Commodities

Office supplies 17,000 9,712 7,288


Miscellaneous expenses 1,500 2,179 (679)


Capital Outlay

Equipment 500,000 - 500,000

Total equipment 500,000 - 500,000

Total Comptroller 1,027,177 596,392 430,785

Information technology

Salaries and wages



Fringe benefits

IMRF match 14,003 - 14,003

Employer's health insurance 17,082 - 17,082


Social security match 8,667 - 8,667

Medicare match 2,020 - 2,020

Life insurance premiums 240 (20) 260

Total fringe benefits 43,489 982 42,507

(Continued)

City of North Chicago, IllinoisGeneral Fund



-95-

Original




Information technology (continued)


Maintenance - equipment $ 87,500 $ 117,995 $ (30,495)

Telephone - 538 (538)

Postage 100 - 100

Travel and training 35,000 - 35,000



Commodities

Operating supplies 25,000 18,297 6,703


Debt service

Loan principal and interest 66,941 70,762 (3,821)

Capital Outlay

Equipment - 44,234 (44,234)

Capital improvement 40,000 1,725 38,275

Total capital outlay 40,000 45,959 (5,959)

Total information technology 467,265 326,338 140,927

Human resources

Salaries and wages




Fringe benefits

IMRF match 14,526 9,256 5,270

Employer's health insurance 18,243 908 17,335

Employer's dental and vision insurance 1,477 835 642





(Continued)




-96-

Original




Human resources (continued)


Telephone $ 1,100 $ 615 $ 485


In-house training 10,000 1,917 8,083

Postage 1,000 304 696

Printing and publishing 3,000 98 2,902




Commodities



Advertising-all departments 5,000 6,650 (1,650)

Employee recognition 5,000 327 4,673

Public relations 500 146 354

Safety incentives 1,000 - 1,000

Miscellaneous expenses 500 718 (218)


Capital Outlay

Equipment 1,200 1,906 (706)

Total human resources 262,786 203,731 59,055

Building and community development

Salaries and wages

Full-time salaries and wages 184,138 259,919 (75,781)


Comp time 8,000 1,062 6,938


(Continued)




-97-

Original




Building and community development (continued)

Fringe benefits

IMRF match $ 22,325 $ 26,112 $ (3,787)


Employer's dental and vision insurance 4,061 4,103 (42)

Social security match 13,773 16,012 (2,239)


Life insurance premiums 2,750 238 2,512



Maintenance - vehicle 1,500 277 1,223

Maintenance - equipment 750 2,633 (1,883)

Telephone 2,000 2,505 (505)

Travel and training 2,000 1,601 399

Postage 2,000 484 1,516

Printing and publishing 2,800 3,217 (417)


Dues and memberships 3,000 425 2,575

Demolition 35,000 61,719 (26,719)


Commodities



Uniforms 500 1,209 (709)

Gas and oil 4,500 3,740 760

Miscellaneous expenses 1,000 128 872


(Continued)


General Fund



-98-

Original




Building and community development (continued)

Debt Service

Loan principal and interest $ 22,726 $ 17,045 $ 5,681

Total debt service 22,726 17,045 5,681

Total building and

community development 423,689 535,411 (111,722)

Building and grounds department


Maintenance - buildings 62,000 66,784 (4,784)

Maintenance - equipment 1,000 424 576

Telephone 1,000 337 663

Building improvements - 56,836 (56,836)



Commodities

Pest control 35,000 34,930 70

Maintenance supplies 8,000 8,069 (69)

Operating supplies 13,000 353 12,647


Total building and grounds

department 232,000 265,588 (33,588)

Total general government 3,294,158 2,613,948 680,210

(Continued)



General Fund


-99-

Original



Administration services


Unemployment insurance $ 50,000 $ 25,430 $ 24,570

Maintenance of equipment 53,285 46,330 6,955

Workers' compensation 375,013 73,045 301,968

Workers' compensation deductible 250,000 282,663 (32,663)

Liability insurance 568,389 644,537 (76,148)

Liability deductibility 510,000 208,693 301,307

Telephone 150,000 215,711 (65,711)

Utilities 240,000 234,698 5,302

Postage 5,000 9,176 (4,176)

Travel and training - 13,450 (13,450)


Auditing services 60,000 83,674 (23,674)

Payroll service 24,000 26,764 (2,764)

Engineering services 90,000 36,256 53,744

Retainer fees 24,000 38,528 (14,528)

Medical services 31,000 12,532 18,468


Refuse collection 795,000 830,355 (35,355)

Redflex traffic systems fees 183,400 160,354 23,046

Lawsuits and attorney fees 244,000 298,886 (54,886)

Public relations 35,000 29,025 5,975

Public relations - community day 75,000 93,358 (18,358)

Reimbursements 30,000 30,000 -

Total contractual services 3,867,087 3,511,543 355,544

(Continued)




General Fund

-100-

Original



Administration services (continued)

Commodities

Office supplies $ 5,000 $ 438 $ 4,562

Miscellaneous expense 5,000 (80,351) 85,351

Total commodities 10,000 (79,913) 89,913

Total administration services 3,877,087 3,431,630 445,457

Highway and streets

Street department

Salaries and wages


Part-time salaries and wages 66,096 - 66,096

Voluntary separation plan - 154 (154)

Sick leave sell back - 406 (406)


Workers' compensation - 4,153 (4,153)


Fringe benefits

IMRF match 78,603 60,308 18,295




Medicare match 11,341 9,440 1,901

Life insurance premiums 1,440 1,526 (86)


(Continued)

General Fund




-101-

Original



Highway and streets (continued)

Street department (continued)


Maintenance - building $ 1,000 $ 4,726 $ (3,726)

Maintenance - vehicles 55,000 54,912 88

Maintenance - equipment 28,500 13,177 15,323

Maintenance - streets 77,250 30,371 46,879

Maintenance - grounds 8,500 13,039 (4,539)

Other maintenance 1,000 - 1,000

Telephone 3,000 2,796 204

Street lighting 10,000 25,379 (15,379)

Landfill and garbage 2,000 - 2,000

Rentals 5,000 3,672 1,328


Postage 250 59 191

Printing and publishing 250 292 (42)

Memberships and dues 50 935 (885)

Medical services 400 - 400



Commodities

Office supplies 1,750 2,191 (441)

Gasoline and oil 70,000 53,238 16,762

Maintenance and supplies 9,000 5,879 3,121

Operating supplies 6,500 14,566 (8,066)

Uniforms 17,750 14,302 3,448

Miscellaneous expenses 1,000 121 879


Debt service

Loan principal and interest 79,128 82,805 (3,677)

(Continued)




-102-

Original



Highway and streets (continued)

Street department (continued)

Capital outlay

Vehicles $ - $ 4,457 $ (4,457)

Equipment 17,000 10,704 6,296

Total capital outlay 17,000 15,161 1,839

Total highway and streets 1,531,281 1,274,994 256,287

Public safety

Police department

Salaries and wages

Full-time salaries and wages 4,986,658 4,936,402 50,256

Part-time salaries and wages 151,639 169,700 (18,061)

Voluntary separation plan - 20,958 (20,958)

Holiday taken - 149,907 (149,907)

Police special detail - 30,568 (30,568)


Police overtime 300,000 999,608 (699,608)

Comp time accrued - 49,751 (49,751)

Sick leave sell back - 10,547 (10,547)


Total salaries and wages 5,488,297 6,591,237 (1,102,940)

Fringe benefits

IMRF match 73,074 92,345 (19,271)

Employer pension contribution 883,695 871,702 11,993




Medicare match 74,505 85,399 (10,894)

Life insurance premiums 9,310 9,806 (496)

Total fringe benefits 2,039,646 1,920,681 118,965

(Continued)

General Fund




-103-

Original



Public safety (continued)

Police department (continued)


Uniform allowance $ 8,775 $ 10,800 $ (2,025)

Maintenance - vehicle 60,000 150,162 (90,162)

Maintenance - equipment 60,000 86,346 (26,346)

Other maintenance 1,000 632 368

Telephone 15,000 20,162 (5,162)

Rentals 14,350 288 14,062


Postage 1,000 172 828



Dues and memberships 2,315 9,343 (7,028)

Animal control 24,000 27,175 (3,175)

Other communication service 15,000 19,938 (4,938)


Commodities

Office supplies 7,250 17,785 (10,535)

Gasoline and oil 145,000 108,667 36,333

Maintenance supplies - 530 (530)

Operating supplies 31,670 55,101 (23,431)

Uniforms 41,500 68,075 (26,575)

Prisoner meals 1,500 3,277 (1,777)

Publications 1,000 306 694

Reimbursements 1,000 - 1,000

Investigative expenses 3,500 4,134 (634)

Crime prevention 26,000 9,969 16,031

Miscellaneous 10,000 15,644 (5,644)

Total commodities 268,420 283,488 (15,068)

(Continued)




-104-

Original




Police department (continued)

Debt service

Loan principal and interest $ 48,732 $ 114,603 $ (65,871)

Capital lease 191,353 111,944 79,409

Total debt service 240,085 226,547 13,538

Capital outlay

Vehicles - (750) 750

Equipment 236,000 172,000 64,000


Total police department 8,590,038 9,593,219 (1,003,181)

Fire department

Salaries and wages

Full-time salaries and wages 2,417,970 2,217,462 200,508


Fire overtime 40,000 82,928 (42,928)

Holiday taken - 73,546 (73,546)

Fire lieutenant pay - 3,542 (3,542)

Overtime allowances 2,000 464 1,536

Sick leave buy back - 12,412 (12,412)

Worker's compensation - 58,832 (58,832)

Good attendance - 10,914 (10,914)

Total salaries and wages 2,499,621 2,482,152 17,469

Fringe benefits

IMRF match 5,412 10,858 (5,446)

Employer pension contribution 613,435 612,133 1,302




(Continued)




-105-

Original




Fire department (continued)

Fringe benefits (continued)

Medicare match $ 33,285 $ 31,176 $ 2,109

Life insurance premiums 3,960 4,967 (1,007)

Total fringe benefits 1,062,756 1,029,104 33,652


Maintenance - vehicles 33,700 48,358 (14,658)

Maintenance - equipment 10,500 65,800 (55,300)

Telephone 6,000 2,441 3,559

Rentals 2,500 1,298 1,202

Travel and training 27,000 37,511 (10,511)

Postage 200 187 13

Printing and publishing 5,000 5,539 (539)

Medical services 12,500 9,532 2,968

Other professional service 10,000 9,540 460



Commodities

Office supplies 2,500 4,441 (1,941)

Gasoline and oil 23,000 23,971 (971)

Maintenance supplies 4,000 1,239 2,761

Operating supplies 3,000 3,172 (172)

Ambulance operating supplies 8,000 14,206 (6,206)

Uniforms 37,000 26,996 10,004


Hazardous material enforcement 4,000 4,011 (11)

Reimbursements 300 546 (246)

Miscellaneous 4,800 6,554 (1,754)


(Continued)




-106-

Original




Debt service

Loan principal and interest $ 20,000 $ 20,000 $ -

Capital lease 10,182 9,337 845

Total debt service 30,182 29,337 845

Capital outlay

Vehicles 145,000 457,209 (312,209)

Equipment 135,000 261,188 (126,188)

Total capital outlay 280,000 718,397 (438,397)

Total fire department 4,112,559 4,533,358 (420,799)

Total public safety 12,702,597 14,126,577 (1,423,980)

Economic development department

Salaries and wages


Pull-time wages 1,376 1,376 -

Comp time 8,000 6,260 1,740

Overtime allowances 1,000 224 776


(Continued)




-107-

Original



Economic development department (continued)

Fringe benefits

IMRF match $ 25,706 $ 18,881 $ 6,825








Telephone 1,000 684 316


Postage 500 30 470

Maintenance - vehicle 500 208 292

Maintenance - building - 168 (168)

Printing and publishing 2,000 8,437 (6,437)


Operating supplies 500 - 500


Principal and interest - 1,812 (1,812)

Lease interest expense - 81 (81)

Equipment 4,000 918 3,082


Commodities


Gasoline and oil 500 151 349


Total economic development department 376,733 268,350 108,383

Economic development incentive 841,271 918,483 (77,212)

Total economic development 1,218,004 1,186,833 31,171

Debt service

State tax loan payment 211,000 211,000 -

Total expenditures $ 22,834,127 $ 22,844,982 $ (10,855)

(Concluded)

General Fund




-108-

NONMAJOR GOVERNMENTAL FUNDS

3 6 15 31

Community Federal

Motor Development Forfeited

Library Fuel Tax Block Grant Property (DEA)

Cash and cash equivalents $ 1,321,650 $ 2,037,774 $ 225,074 $ 6,205

Property tax receivable 754,442 - - -

Intergovernmental receivable - 75,760 - -

Other receivables - 136 304,160 -

Due from other funds - 79,011 - -

Property held for resale - - 20,072 - -

Total assets $ 2,076,092 $ 2,192,681 $ 549,306 $ 6,205


AND FUND BALANCE

Liabilities

Accounts payable $ 56,831 $ 205,370 $ 13,872 $ -

Accrued payroll 7,896 - - -

Other liabilities - - 8 -

Unearned fees - - - -

Due to other funds 27,340 - 150,071 -

Total liabilities 92,067 205,370 163,951 -

Deferred inflows

Property taxes levied for a future period 390,440 - - -

Total deferred inflows 390,440 - - -

Fund balances (deficit)

Nonspendable for property held for resale - - 20,072 -

Restricted for special revenue funds 1,593,585 1,987,311 365,283 6,205

Restricted for debt service - - - -

Restricted for capital projects - - - -

Total fund balances (deficit) 1,593,585 1,987,311 385,355 6,205


and fund balances (deficit) $ 2,076,092 $ 2,192,681 $ 549,306 $ 6,205

City of North Chicago, IllinoisNonmajor Governmental Funds

Combining Balance Sheet (Continued)

ASSETS

Special Revenue Funds

April 30, 2015

-109-

33 38 54 77 78

Total

Nonmajor

Delta Institute Seized Special

E911 Emerald Ash Drug Money DCEO Grant Place Revenue

Emergency Borer Grant (State) Infrastructure Grant Place Operating Funds

$ 414,322 $ 7,060 $ 48,939 $ 25,033 $ 510,142 $ - $ 4,596,199

- - - - - - 754,442

- - - - - - 75,760

38,027 - - 114,661 79,103 - 536,087

13,531 - - - 41,962 39,558 174,062

- - - - 1,200,000 - 1,220,072

$ 465,880 $ 7,060 $ 48,939 $ 139,694 $ 1,831,207 $ 39,558 $ 7,356,622

$ 15,626 $ - $ - $ 72,519 $ - $ 23,730 $ 387,948

- - - - - - 7,896

- - - - - 3,135 3,143

- - - 67,142 - - 67,142

- - 6,836 - - 42,577 226,824 -

15,626 - 6,836 139,661 - 69,442 692,953

- - - - - - 390,440

- - - - - - 390,440

- - - - 1,200,000 - 1,220,072

450,254 7,060 42,103 33 631,207 (29,884) 5,053,157

- - - - - - -

- - - - - - -

450,254 7,060 42,103 33 1,831,207 (29,884) 6,273,229

$ 465,880 $ 7,060 $ 48,939 $ 139,694 $ 1,831,207 $ 39,558 $ 7,356,622

(Continued)

-110-

20 24 29

Downtown Downtown Downtown

Tax Increment Tax Increment Tax Increment

Financing Financing Financing

Redevelopment Redevelopment Redevelopment

Project Area Debt Project Area Debt Project Area Debt

Series 2005A Service 2007A Service 2007B

Cash and cash equivalents $ 157,475 $ 10,513 $ 16,303

Property tax receivable 833,828 256,944 207,111

Intergovernmental receivable - - -

Other receivables - - -

Due from other funds - - -

Property held for resale - - -

Total assets $ 991,303 $ 267,457 $ 223,414


AND FUND BALANCE

Liabilities

Accounts payable $ - $ - $ $ -

Accrued payroll - - -

Other liabilities - - -

Unearned fees - - -

Due to other funds 182,400 - -

Total liabilities 182,400 - -

Deferred inflows

Property taxes levied for a future period 147,265 132,974 107,184

Total deferred inflows 147,265 132,974 107,184

Fund balances (deficit)

Nonspendable for property held for resale - - -

Restricted for special revenue funds - - -

Restricted for debt service 661,638 134,483 116,230

Restricted for capital projects - - -

Total fund balances (deficit) 661,638 134,483 116,230


and fund balances (deficit) $ 991,303 $ 267,457 $ 223,414

ASSETS

Debt Service Funds

April 30, 2015


Combining Balance Sheet (Continued)

-111-

22 58

Total

Total Total

Grant Place Nonmajor Nonmajor

Retail Center Debt Capital Nonmajor

Debt Service Capital Project Governmental

Service 2007C Funds Improvement Funds Funds

$ 20,173 $ 204,464 $ 82,459 $ 82,459 $ 4,883,122

799,748 2,097,631 - - 2,852,073

- - - - 75,760

- - - - 536,087

- - - - 174,062

- - - - 1,220,072

$ 819,921 $ 2,302,095 $ 82,459 $ 82,459 $ 9,741,176

$ - $ - $ - $ - $ 387,948

- - - - 7,896

- - - - 3,143

- - - - 67,142

39,558 221,958 - - 448,782

39,558 221,958 - - 914,911

413,886 801,309 - - 1,191,749

413,886 801,309 - 1,191,749

- - - - 1,220,072

- - - - 5,053,157

366,477 1,278,828 - - 1,278,828

- - 82,459 82,459 82,459

366,477 1,278,828 82,459 82,459 7,634,516

$ 819,921 $ 2,302,095 $ 82,459 $ 82,459 $ 9,741,176

(Concluded)

Debt Service Funds Capital Project Funds

-112-

3 6 15 31

3 6 15 31

Community Federal

Motor Development Forfeited

Library Fuel Tax Block Grant Property (DEA)

Revenues

Property taxes $ 741,979 $ - $ - $ -

Taxes - other - - - -

Intergovernmental - 1,116,845 - -

Grants 101,782 - 402,757 -

Fines and fees 16,312 - - -

Interest 418 599 46 3

Miscellaneous 8,391 15,556 - -

Total revenues 868,882 1,133,000 402,803 3

Expenditures

Current

Administration - - 20,107 -

Highway and streets - 160,361 - -

Public safety - - - 568

Culture and recreation 600,387 - - -

Economic development - - 1,307,225 -

Debt service

Principal retirement - - - -

Interest and other - - - -

Bond issuance costs - - - -

Capital outlay 97,606 413,095 - -

Total expenditures 697,993 573,456 1,327,332 568

Excess (deficiency) of revenues over expenditures 170,889 559,544 (924,529) (565)


Bond proceeds - - - -

Premium on bonds sold - - - -

Transfer to escrow agent - - - -

Transfers in (out) - (13,742) - -

Gain on sale of property held for resale - - 41,299 -

Total other financing sources - (13,742) 41,299 -

Net change in fund balance 170,889 545,802 (883,230) (565)

Fund balance (deficit), beginning of year 1,422,696 1,441,509 1,268,585 6,770

Fund balance (deficit), end of year $ 1,593,585 $ 1,987,311 $ 385,355 $ 6,205


Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances (Deficit)


Special Revenue Funds

-113-

33 38 77

33 38 77 78

Total

Nonmajor

Delta Institute Seized Special

E911 Emerald Ash Drug Money DCEO Grant Place Revenue

Emergency Borer Grant (State) Infrastructure Grant Place Operating Funds

$ - $ - $ - $ - $ - $ - $ 741,979

154,852 - - - - - 154,852

- - 13,182 - - - 1,130,027

- 5,073 - 72,519 - - 582,131

- - - - - - 16,312

158 - 24 9 63 2 1,322

- - - - 6,639 100,617 131,203

155,010 5,073 13,206 72,528 6,702 100,619 2,757,826

- - - - 3,596 - 23,703

- - - - - - 160,361

47,842 - 20,840 - - - 69,250

- - - 72,519 - - 672,906

- 32,940 - - - 72,569 1,412,734

- - - - - - -

- - - - - - -

- - - - - - -

58,993 - - - - - 569,694

106,835 32,940 20,840 72,519 3,596 72,569 2,908,648

48,175 (27,867) (7,634) 9 3,106 28,050 (150,822)

- - - - - - -

- - - - - - -

- - - - - - -

- 57,292 - - - - 43,550

- - - - - - 41,299

- 57,292 - - - - 84,849

48,175 29,425 (7,634) 9 3,106 28,050 (65,973)

402,079 (22,365) 49,737 24 1,828,101 (57,934) 6,339,202

$ 450,254 $ 7,060 $ 42,103 $ 33 $ 1,831,207 $ (29,884) $ 6,273,229

(Continued)

-114-

24 29

Downtown Downtown Downtown

Tax Increment Tax Increment Tax Increment

Financing Financing Financing

Redevelopment Redevelopment Redevelopment

Project Area Debt Project Area Debt Project Area Debt

Series 2005A Service 2007A Service 2007B

Revenues

Property taxes $ 1,133,892 $ 252,015 $ 204,908

Taxes - other - - -

Intergovernmental - - -

Grants - - -

Fines and fees - - -

Interest 115 13 18

Miscellaneous - - -

Total revenues 1,134,007 252,028 204,926

Expenditures

Current

Administration - 445 -

Highway and streets - - -

Public safety - - -

Culture and recreation - - -

Economic development - - -

Debt service

Principal retirement 595,000 170,000 -

Interest and other 401,422 78,395 205,655

Bond issuance costs 140,646 - -

Capital outlay - - -

Total expenditures 1,137,068 248,840 205,655

Excess (deficiency) of revenues over expenditures (3,061) 3,188 (729)


Bond proceeds 6,010,000 - -

Premium on bonds sold 535,135 - -

Transfer to escrow agent (6,329,814) - -

Transfers in (out) - - -

Gain on sale of property held for resale - - -

Total other financing sources 215,321 - -

Net change in fund balance 212,260 3,188 (729)

Fund balance (deficit), beginning of year 449,378 131,295 116,959

Fund balance, end of year $ 661,638 $ 134,483 $ 116,230

(Continued)


Debt Service Funds


Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances (Deficit) (Continued)

-115-

Total 22 58

Total Total

Grant Place Nonmajor Nonmajor

Retail Center Debt Capital Nonmajor

Project Area Debt Debt Service Capital Project Governmental

Service 2007C Funds Improvement Funds Funds

$ 778,529 $ 2,369,344 $ - $ - $ 3,111,323

- - - - 154,852

- - - - 1,130,027

- - - - 582,131

- - - - 16,312

47 193 30 30 1,545

- - 53,895 53,895 185,098

778,576 2,369,537 53,925 53,925 5,181,288

- 445 - - 24,148

- - - - 160,361

- - - - 69,250

- - - - 672,906

- - - - 1,412,734

290,000 1,055,000 - - 1,055,000

475,870 1,161,342 - - 1,161,342

- 140,646 - - 140,646

- - - - 569,694

765,870 2,357,433 - - 5,266,081

12,706 12,104 53,925 53,925 (84,793)

-

- 6,010,000 - - 6,010,000

- 535,135 - - 535,135

- (6,329,814) - - (6,329,814)

- - - - 43,550

- - - - 41,299

- 215,321 - - 300,170

12,706 227,425 53,925 53,925 215,377

353,771 1,051,403 28,534 28,534 7,419,139

$ 366,477 $ 1,278,828 $ 82,459 $ 82,459 $ 7,634,516

(Concluded)

Capital Project Funds

-116-

ENTERPRISE FUNDS

07

Original



Operating revenues

Charges for sales and services $ 6,507,726 $ 6,021,491 $ (486,235)

Miscellaneous 10,050 12,943 2,893

Total operating revenues 6,517,776 6,034,434 (483,342)

Operating expenses

Operations 3,358,153 2,961,979 396,174

Depreciation 552,955 547,409 5,546

Total operating expenses 3,911,108 3,509,388 401,720

Operating income 2,606,668 2,525,046 (81,622)


Property taxes - 15,054 15,054

Interest income 1,300 12,263 10,963

Principal retirement (165,000) - 165,000

Issuance costs - (27,882) (27,882)

Interest expense (113,188) (40,460) 72,728

Total nonoperating expenses (276,888) (41,025) 235,863

Income before contributions and transfers 2,329,780 2,484,021 154,241

Transfers out (1,600,000) (1,600,000) -

Change in net position $ 729,780 884,021 $ 154,241

Net position, beginning of year 15,934,083

Net position, end of year $ 16,818,104

(Continued)


Water Fund

Schedule of Revenues, Expenses, and Changes in Net Position - Budget and Actual


-117-

Original



Operating revenues

Charges for sales and services

Industrial water $ 2,037,900 $ 2,274,492 $ 236,592

Abbott park water 996,650 662,001 (334,649)

Abbott raw water 832,000 672,239 (159,761)

Residential water 1,561,300 1,303,813 (257,487)

Commercial water 352,000 284,839 (67,161)

Water resumption 5,700 17,906 12,206

Meter sales 10,000 13,797 3,797

Tie-in fees 2,500 200 (2,300)

Water/sewer assessment 500 100 (400)

Base fees 642,000 651,532 9,532

Water penalty 45,000 59,012 14,012

Raw water equipment 22,176 81,560 59,384

Total charges for sales and services 6,507,726 6,021,491 (486,235)

Reimbursement and rebates 50 - (50)

Miscellaneous 10,000 12,943 2,943

Total other revenues 10,050 12,943 2,893

Total operating revenues $ 6,517,776 $ 6,034,434 $ (483,342)

(Concluded)



Water Fund

Schedule of Operating Revenues - Budget and Actual

-118-

Original



Operating expenses

Salaries and wages

Full-time salaries and wages $ 848,704 $ 819,709 $ 28,995


Comptime used - 2,920 (2,920)

Compensated absences - 6,597 (6,597)


Holiday - 3,474 (3,474)



Fringe benefits

IMRF match 85,295 92,158 (6,863)




Medicare match 12,306 12,741 (435)

Life insurance premiums 1,680 3,326 (1,646)



Maintenance - buildings 140,000 108,437 31,563

Maintenance - vehicles 2,000 11,770 (9,770)

Maintenance - equipment 106,000 60,425 45,575

Maintenance - utility system 55,000 3,263 51,737

Other maintenance 20,000 50,379 (30,379)

Telephone 3,500 2,506 994

Utilities 685,000 676,156 8,844

Rentals 1,000 742 258

Medical service 400 - 400


Postage 12,000 11,358 642


Fiber option project 200,000 - 200,000

(Continued)


Water Fund

Schedule of Operating Expenses - Budget and Actual (Continued)


-119-

Original



Operating expenses (continued)

Contractual services (continued)

Engineering services $ 10,000 $ 18,240 $ (8,240)


Dues and memberships 750 (70) 820

Sludge treatment 50,000 26,153 23,847

Intake inspection 40,000 38,510 1,490

Total contractual services 1,565,050 1,262,056 302,994

Commodities


Gasoline and oil 25,000 15,555 9,445

Maintenance supplies 40,000 2,241 37,759


Uniforms 10,750 6,477 4,273

Miscellaneous expenses 1,000 4,601 (3,601)


Capital outlay

Other improvements 125,000 181,751 (56,751)

Vehicles 40,000 25,185 14,815

Equipment 100,000 28,770 71,230

Meters 60,000 34,999 25,001


Depreciation 552,955 547,409 5,546

Total operating expenses $ 3,911,108 $ 3,509,388 $ 401,720

(Concluded)



Water Fund


-120-

Original



Operating revenues

Charges for sales and services $ 1,626,490 $ 1,415,274 $ (211,216)

Total operating revenues 1,626,490 1,415,274 (211,216)

Operating expenses

Operations 1,074,421 802,882 271,539

Depreciation - 123,744 (123,744)

Total operating expenses 1,074,421 926,626 147,795

Operating income 552,069 488,648 (63,421)


Property taxes - 15,667 15,667

Interest income 600 11,975 11,375

Principal retirement (87,180) - 87,180

Issuance costs - (29,020) (29,020)

Interest expense (65,077) (57,993) 7,084

Total nonoperating expenses (151,657) (59,371) 92,286

Income before transfers 400,412 429,277 28,865

Transfers out (400,000) (401,169) (1,169)

Changes in net position $ 412 28,108 $ 27,696

Net position, beginning of year 4,344,668

Net position, end of year $ 4,372,776

(Continued)


Sewer Fund

Schedule of Revenues, Expenses, and Changes in Net Position - Budget and Actual


-121-

Original



Operating revenues

Charges for sales and services

Residential sewer $ 636,100 $ 447,762 $ (188,338)

Industrial sewer 758,000 767,300 9,300

Penalties 11,300 17,887 6,587

Commercial sewer 130,900 88,841 (42,059)

Base fees 90,190 93,484 3,294

Total charges for sales and services 1,626,490 1,415,274 (211,216)

Total operating revenues $ 1,626,490 $ 1,415,274 $ (211,216)

(Concluded)



Sewer Fund

Schedule of Operating Revenues - Budget and Actual

-122-

Original



Operating expenses

Salaries and wages

Full-time salaries and wages $ 223,068 $ 271,183 $ (48,115)



Compensated absences - (9,818) 9,818


Fringe benefits

IMRF match 22,418 29,819 (7,401)

Employer's health insurance 46,188 57,089 (10,901)







Maintenance - building 162,500 17,328 145,172

Maintenance - vehicles 15,000 15,231 (231)

Maintenance - equipment 5,000 50 4,950

Maintenance - grounds 500 - 500

Maintenance - utility system 28,000 26,487 1,513

Other maintenance 2,000 - 2,000

Telephone 3,000 109 2,891

Rentals 5,000 - 5,000

Medical service 400 - 400


Landfill and garbage 30,000 - 30,000

Engineering services 11,000 12,893 (1,893)


Dues and memberships 1,150 - 1,150


(Continued)


Sewer Fund

Schedule of Operating Expenses - Budget and Actual


-123-

Original



Operating expenses (continued)

Commodities

Office supplies $ 500 $ 158 $ 342

Maintenance supplies 85,000 91,235 (6,235)


Uniforms 4,100 4,331 (231)

Vehicles 30,000 - 30,000

Miscellaneous 1,000 238 762


Bad debt expense - 2,204 (2,204)

Capital outlay

Equipment 50,000 44,689 5,311


Depreciation - 123,744 (123,744)

Total operating expenses $ 1,074,421 $ 926,626 $ 147,795

(Concluded)




Sewer Fund

-124-

INTERNAL SERVICE FUNDS

36 40 Total

Dental and Retiree's Internal

Vision Premium Service Funds

ASSETS

Cash and cash equivalents $ 188,271 $ 151,758 $ 340,029

Other receivables 21,572 - 21,572

Total assets 209,843 151,758 361,601

LIABILITIES

Accounts payable 11,172 34,839 46,011

Due to General Fund - 116,919 116,919

Claims payable 12,803 - 12,803

Total liabilities 23,975 151,758 175,733

NET POSITION

Unrestricted $ 185,868 $ - $ 185,868



Combining Schedule of Net Position

April 30, 2015

-125-

36 40

Total



Operating revenues

Charges for sales and services $ 151,182 $ 170,434 $ 321,616

Total operating revenues 151,182 170,434 321,616

Operating expenses

Premiums / claim payments 122,955 170,487 293,442

Operating income 28,227 (53) 28,174

Nonoperating revenues

Interest income 79 53 132

Change in net position 28,306 - 28,306

Net position, beginning of year 157,562 - 157,562

Net position, end of year $ 185,868 $ - $ 185,868



Combining Schedule of Revenues, Expenses, and Changes in Net Position


-126-

36 40

Total



Cash flows from operating activities

Cash received from other funds $ 129,610 $ 170,434 $ 300,044

Cash payments for claims and services (125,640) (148,337) (273,977)

Net cash provided by operating activities 3,970 22,097 26,067

Cash flows from noncapital financing activities

Interfund borrowing - 40,864 40,864

Net cash provided by noncapital financing activities - 40,864 40,864

Cash flows from investing activities

Interest received 79 53 132

Net cash provided by investing activities 79 53 132

NET INCREASE IN CASH AND

CASH EQUIVALENTS 4,049 63,014 67,063

Cash and cash equivalents, beginning of year 184,222 88,744 272,966

Cash and cash equivalents, end of year $ 188,271 $ 151,758 $ 340,029

Reconciliation of operating income to net

cash provided by operating activities

Operating income $ 28,227 $ (53) $ 28,174

Adjustments to reconcile operating income to net cash

provided by operating activities

Increase in other receivables (21,572) - (21,572)

Decrease in estimated claims liability (1,856) - (1,856)

Decrease (increase) in accounts payable (829) 22,150 21,321

Net cash provided by operating activities $ 3,970 $ 22,097 $ 26,067



Combining Schedule of Cash Flows

For the year ended April 30, 2015

-127-

OTHER SUPPLEMENTARY INFORMATION

(Unaudited)

Date March 10, 2005

Issuance $9,325,000

Due November 1, as set forth below

Registration Fully registered

Paying Agent Amalgamated Bank of Chicago

Chicago, Illinois

Interest Dates May 1 and November 1

Fiscal Year Annual

Ended Interest Debt

April 30, Rate Principal Interest Service

2016 5.00% $ 640,000 $ 170,500 $ 810,500

General Governmental Obligation

Series 2005A


Schedule of Annual Debt Service Requirements

April 30, 2015


General Obligation Bonds Series 2005A

-128-

Date March 10, 2005

Issuance $3,860,000




Chicago, Illinois


Fiscal Year Annual

Ended Interest Debt


2016 4.00% $ 175,000 $ 61,750 $ 236,750

Enterprise Obligation

Series 2005B



April 30, 2015


General Obligation Bonds Series 2005B

-129-

Date May 9, 2007

Issuance $2,475,000




Chicago, Illinois


Fiscal Year Annual

Ended Interest Debt


2016 4.00% $ 180,000 $ 74,400 $ 254,400

2017 4.00 195,000 67,200 262,200

2018 4.00 210,000 59,400 269,400

2019 4.00 220,000 51,000 271,000

2020 4.00 240,000 42,200 282,200

2021 4.00 255,000 32,600 287,600

2022 4.00 270,000 22,400 292,400

2023 4.00 290,000 11,600 301,600

$ 1,860,000 $ 360,800 $ 2,220,800



Series 2007A


General Obligation Bonds Series 2007A


April 30, 2015

-130-

Date May 9, 2007

Issuance $4,740,000




Chicago, Illinois


Fiscal Year Annual

Ended Interest Debt


2016 4.30% $ - $ 205,060 $ 205,060

2017 4.30 - 205,060 205,060

2018 4.30 - 205,060 205,060

2019 4.30 - 205,060 205,060

2020 4.30 - 205,060 205,060

2021 4.30 - 205,060 205,060

2022 4.30 - 205,060 205,060

2023 4.30 - 205,060 205,060

2024 4.30 - 205,060 205,060

2025 4.30 - 205,060 205,060

2026 4.30 - 205,060 205,060

2027 4.30 - 205,060 205,060

2028 4.30 - 205,060 205,060

2029 4.30 415,000 205,060 620,060

2030 4.30 435,000 187,215 622,215

2031 4.30 450,000 168,510 618,510

2032 4.30 470,000 149,160 619,160

2033 4.30 490,000 128,950 618,950

(Continued)


General Obligation Bonds Series 2007B


April 30, 2015


Series 2007B


-131-

Fiscal Year Annual

Ended Interest Debt


2034 4.35 $ 510,000 $ 107,880 $ 617,880

2035 4.35 535,000 85,695 620,695

2036 4.35 555,000 62,423 617,423

2037 4.35 580,000 38,280 618,280

2038 4.35 300,000 6,525 306,525

$ 4,740,000 $ 3,805,478 $ 8,545,478

(Concluded)


Series 2007B (Continued)

General Obligation Bonds Series 2007B (Continued)


April 30, 2015



-132-

Date August 15, 2007

Issuance $8,860,000




Chicago, Illinois


Fiscal Year Annual

Ended Interest Debt


2016 5.81% $ 325,000 $ 457,388 $ 782,388

2017 5.81 345,000 437,925 782,925

2018 5.81 405,000 416,137 821,137

2019 5.81 450,000 391,300 841,300

2020 5.81 495,000 363,847 858,847

2021 5.81 550,000 333,490 883,490

2022 5.81 600,000 300,083 900,083

2023 6.01 660,000 263,480 923,480

2024 6.01 720,000 222,671 942,671

2025 6.01 765,000 178,046 943,046

2026 6.01 810,000 130,718 940,718

2027 6.01 860,000 80,534 940,534

2028 6.01 910,000 27,346 937,346

$ 7,895,000 $ 3,602,965 $ 11,497,965



Series 2007C


General Obligation Bonds Series 2007C


April 30, 2015

-133-

Date February 4, 2015

Issuance



Paying AgentAmalgamated Bank of Chicago

Chicago, Illinois

Interest DatesMay 1 and November 1

Fiscal Year Annual

Ended Interest Debt


2016 3.00% $ - $ 217,850 $ 217,850

2017 3.00 695,000 207,425 902,425

2018 3.00 755,000 185,675 940,675

2019 4.00 805,000 162,275 967,275

2020 4.00 845,000 133,300 978,300

2021 4.00 905,000 98,300 1,003,300

2022 4.00 970,000 60,800 1,030,800

2023 4.00 1,035,000 20,700 1,055,700

$ 6,010,000 $ 1,086,325 $ 7,096,325

$6,010,000



General Obligation Bonds Series 2014A Refunding


April 30, 2015


Series 2014A Refunding

-134-

Date February 4, 2015

Issuance




Chicago, Illinois


Fiscal Year Annual

Ended Interest Debt


2016 3.00% $ - $ 85,000 $ 85,000

2017 3.00 195,000 82,075 277,075

2018 3.00 200,000 76,150 276,150

2019 4.00 205,000 70,075 275,075

2020 4.00 215,000 62,700 277,700

2021 4.00 220,000 54,000 274,000

2022 4.00 230,000 45,000 275,000

2023 4.00 240,000 35,600 275,600

2024 4.00 245,000 25,900 270,900

2025 4.00 260,000 15,800 275,800

265,000 5,300 270,300

$ 2,275,000 $ 557,600 $ 2,832,600

$2,275,000

Enterprise Obligation


General Obligation Bonds Series 2014B Refunding


April 30, 2015


Series 2014B Refunding

-135-

"The General Assembly may limit by law the amount and require referendum approval of debt

to be incurred by home rule municipalities, payable from ad valorem property tax receipts,

only in excess of the following percentages of the assessed value of its taxable property...(2) if

its population is more than 25,000 and less than 500,000 an aggregate of one

percent...indebtedness which is outstanding on the effective date (July 1, 1971) of this

constitution or which is thereafter approved by referendum...shall not be included in the

foregoing amounts."

To date, the General Assembly has set no limits for home rule municipalities.


Legal Debt Margin

April 30, 2015

The City is a home rule municipality. Article VII, Section 6(k) of the 1970 Illinois Constitution

governs computation of the legal debt margin.

-136-

city of north chicago, illinoisnorthchicagorebuild.govoffice3.com/vertical/sites...fund financial...

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